U.S. Venture Capital Activity Soars to New Highs in 2021 as Deal Value Exceeds $300 Billion and Fundraising Tops $100 Billion

News provided by

National Venture Capital Association

Jan 14, 2022, 08:01 ET

SEATTLE, Jan. 14, 2022 /PRNewswire/ -- Venture capital dealmaking, exit and fundraising values all broke records in 2021 by stunning amounts, according to the PitchBook-NVCA Venture Monitor, the authoritative quarterly report produced by PitchBook and the National Venture Capital Association with support from Insperity. The top-line figures for the U.S. VC industry in 2021 show a staggering $329.9 billion was invested across an estimated 17,054 deals, a record for deal count and roughly double 2020's previous deal value high. Investors raised an unprecedented $128.3 billion, passing the $100 billion mark for the first time. In addition, $774.1.4 billion in annual exit value was created by VC-backed companies going public or being acquired. About $681 billion of that was realized through public listings, confirming the favorable conditions presented by strong public markets and valuations as well as the availability of SPACS as an alternative to IPOs. Overall, the venture ecosystem observed a sharp uptick in valuations across all stages of the investment cycle.

"By all metrics, 2021 was a banner year for the U.S. VC ecosystem," said John Gabbert, founder and CEO of PitchBook. "A fair portion of the new investment records can be attributed to the record levels of capital washing through the system. VC dry powder at an all-time high and a rapidly growing number of crossover investors are participating in, or even leading, VC deals. With VC returns outpacing every other private capital asset class, we expect LPs to continue to allocate capital toward venture at unprecedented rates in the coming year."

"The best news about these record achievements is that we are creating more American made entrepreneurs than ever before," said NVCA President and CEO Bobby Franklin. "Entrepreneurs are our nation's job creators who plant the seeds for the new high growth companies of tomorrow. To ensure their future success we need policymakers to think about the long game when it comes to the startup ecosystem. These numbers show the massive impact our industry can have on our nation's economic success."

HIGHLIGHTS:

Investment Activity

VC deal activity reached $88.2 billion invested across 4,591 deals in the fourth quarter, bringing year-to-date totals to $329.9 billion across an estimated 17,054 deals and nearly doubling the previous annual record set in 2020.
Nontraditional investors participated in 6,483 deals valued at more than $253 billion, representing 64% year-over-year growth in participation.
Mega-deal activity rose sharply in 2021, with $190.8 billion raised. Growth outpaced the broader market and nearly equaled the roughly $200 billion of capital invested in mega deals over the previous three years.
A record number of startups received first financings in 2021, collectively raising $23.8 billion and exceeding 4,000 investments for the first time.

Exit Activity

Total 2021 exit value was over $774.1 billion, representing an astonishing 168.0% year-over-year growth. Q4 alone returned $182.7 billion in liquid value to investors across more than 500 exits.
Public listings accounted for 88% of total VC exit value at $681.5 billion. Rivian, Aurora and Gitlab led the way in Q4 in terms of highest-valued public listings, but the story is also about the breadth of exit activity with 296 VC-backed public listings representing a 114.5% increase year over year

Fundraising Activity

VC fundraising activity for 2021 eclipsed $100 billion for the first time, notching a year-to-date total of $128.3 billion across 730 funds and representing a 47.5% year-over-year increase compared to 2020's record of $86.9 billion.
The median and average fundraising value in 2021 also saw a notable jump to $50 million and $188.1 million, respectively, a significant increase over 2020's median and average fundraising value of $42.1 million and $156.9 million.

Click HERE to download the full report.

Venture Monitor Q4 Webinar – February 2, 2022, from 10:00 – 11:00 am PDT
PitchBook and NVCA are hosting the webinar in partnership with Insperity.

Click HERE to register.

About PitchBook
PitchBook is a financial data and software company that provides transparency into the capital markets to help professionals discover and execute opportunities with confidence and efficiency. PitchBook collects and analyzes detailed data on the entire venture-capital, private-equity, and M&A landscape—including public and private companies, investors, funds, investments, exits and people. The company's data and analysis are available through the PitchBook Platform, industry news and in-depth reports. Founded in 2007, PitchBook has offices in Seattle, San Francisco, New York, and London and serves more than 60,000 professionals around the world. In 2016, Morningstar acquired PitchBook, which now operates as an independent subsidiary.

About National Venture Capital Association
The National Venture Capital Association (NVCA) empowers the next generation of American companies that will fuel the economy of tomorrow. As the voice of the U.S. venture-capital and startup community, NVCA advocates for public policy that supports the American entrepreneurial ecosystem. Serving the venture community as the preeminent trade association, NVCA arms the venture community for success, serving as the leading resource for venture capital data, practical education, peer-led initiatives, and networking. For more information about NVCA, please visit www.nvca.org.

Quote Sheet

Byron Deeter, Partner at Bessemer Venture Partners
"2021 was a milestone year for the Venture Capital industry across almost every metric, and reflects the immense innovation that continues in the private technology sector despite immense global political and economic volatility."

Robert Schwandt, Regional Sales Manager at Insperity
"Building and maintaining resiliency during the continued pandemic will be a critical factor for any portfolio company to succeed and thrive in the new year and beyond. Startup founders and leaders must continue to be innovative thinkers during these most uncertain times while mustering their best management skills to rethink, refocus, and rediscover core competencies, including a strong human capital strategy. Successful companies strengthen their people and leverage their distributed knowledge and experience to accomplish it."

SOURCE National Venture Capital Association