UPDATED 00:01 EDT / JULY 14 2021


US venture capital still on fire and on pace for another record-setting year

Venture capital activity in the U.S. rose in the first half of 2021 and is on pace for another record-setting year, according to the latest PitchBook-NVCA Venture Monitor report released today.

PitchBook-NVCA found that in the first half, various forms of VC financing hit record highs — not only half-year highs but annual highs — halfway into the year. According to the report, the total capital available to VC-backed companies will likely continue to swell through the end of 2021, especially with later-stage funding.

Reflecting similar data published by CB Insights on July 8, PitchBook noted that the exit market was also robust as outsized exits propelled most capital distributions and IPOs remained the main route to liquidity for the most prominent VC-backed startups.

Investment activity hit $150 billion in the U.S. for the first half of the year across 7,058 deals. By comparison, venture capital totaled $164.3 billion in all of 2020, the previous record high, across 12,362 deals. Megadeals dominated the figures with $85.5 billion in funding for the six months to June 30 across 385 deals. The half-year figure has already passed all of 2020’s $75.2 billion and 329 deals.

Unlike mega-deals, angel and seed funding for the first half have not surpassed previous full-year totals, but they’re on track to do so. $2.1 billion and $4.9 billion were invested in angel and seed rounds across 1,271 and 1,502 deals, respectively. Funding and deal count for both are new half-year records.

Early-stage financing closed the first six months at $34.4 billion over 2,518 deals and, like other sectors of the market, is also on track for a record high. Late-stage VC was ever so close in the first half to beating the full-year 2020 total in financing, with $109.4 invested compared with $109.8 billion in 2020.

U.S. exit activity, meaning acquisitions and public stock offerings, came in at $372.2 billion across 883 deals in the first six months of 2021, setting a new annual record with half the year to go. By comparison, there was $287.5 billion in exits for the entirety of 2020.

The surge in investments is also reflected in the amount of money flowing into venture funds. Some $73.5 billion was raised across 337 U.S. venture funds for the year to June 30 compared with $80.5 billion for the whole of 2020.

“The numbers don’t lie and they prove that entrepreneurs and startups are helping to strengthen our economic recovery from the pandemic,” NVCA President and Chief Executive Officer Bobby Franklin said in a statement. “Americans are innovating and investing more than ever, creating new companies and new jobs at a time when the country needs it the most.”

Although the trends moving forward look good, there was some caution. John Gabbert, founder and CEO of PitchBook, noted that “as the industry looks toward the second half of the year, investors are evaluating whether this level of dealmaking will persist and what its broader impact might be.”

Picture: Steven Damron/Wikimedia Commons

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