Science & Technology

Venture capital funding and exits hit new record highs

Venture capital in the U.S. has hit new high records of investment, according to the latest VC report from PitchBook-NVCA Venture Monitor released today.

The jump was riven by an explosion of mega-deals and record nontraditional investor participation, as investment totals in the quarter broke all previous records.

Venture capital deals in the quarter hit $82.8 billion across an estimated 3,518 deals in the third quarter. That brings year-to-date totals to $238.7 billion across 12,837 deals, surpassing the previous annual record of $166.4 billion set in 2020.

Nontraditional investors participated in deals responsible for 77% of total year-to-date investment value. The Pitchbook report notes that their involvement is even more pronounced when looking at mega-rounds, with 88% of deals receiving nontraditional investor backing.

Megadeals, those with investment rounds of over $100 million, have risen sharply year-to-date, with 597 deals over $100 million compared with only 333 for the whole of 2020. Rounds of over $100 million now count for 57% of all venture capital deals.

The staggering growth in VC investment accompanied a notable increase in venture capital funds. There were 161 new venture capital funds in the third quarter, with the total across all VC funds hitting $96 billion across 526 funds.

Exit activity for the year to date has also smashed all records. Exits, meaning acquisitions or initial public offerings of stock, have brought in $582.5 billion in liquid value across 1,150 deals in just nine months — surpassing $500 billion for the first time and doubling 2020’s previous record.

IPOs accounted for 88% of the total exit value at $513.6 billion. An open IPO window and increase in special-purpose acquisition company or SPAC business combinations pushed the third-quarter public listing total to 93, with Robinhood’s $30 billion debut the largest.

“There is no denying that the startup ecosystem is powering America’s economic comeback,” NVCA Chief Executive Officer Bobby Franklin said in a statement. “Lawmakers in Washington who are looking for ways to enhance our economic future should check out these record-shattering numbers. The VC industry is this country’s biggest job engine, and we have the numbers to back it up.”

Amid the COVID-19 pandemic, global shutdowns and now unprecedented stress on the global supply chain, the figures are staggering. Whether it ends with a post-Roaring Twenties bang or more of a whimper remains to be seen.

Photo: Coolcaesar/Wikimedia Commons

Show your support for our mission by joining our Cube Club and Cube Event Community of experts. Join the community that includes Amazon Web Services and CEO Andy Jassy, Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger and many more luminaries and experts.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *