To obtain the complete report and knowledge packs, please click here. PitchBook and NVCA will even be internet hosting a webinar in partnership with Silicon Valley Financial institution and Velocity World on February 3, 2021 from 10:00 – 11:00 am PST. Please click here to register.
“The unprecedented macro occasions of 2020 didn’t deter the general VC trade, which reached one other banner yr throughout the enterprise cycle,” stated Bobby Franklin, President and CEO of NVCA. “The startup ecosystem performed a essential function within the expertise, providers, and healthcare help the nation has relied on over the previous ten months, and the trade’s resilience and long-term funding eye will likely be pivotal to the nation’s financial restoration in 2021 and past. Whereas some segments of the ecosystem felt the brunt of the headwinds from the pandemic and financial uncertainty greater than others, VC traders are beginning the yr in a powerful place with ample dry powder to place to work.”
“2020 confirmed simply how resilient the US enterprise ecosystem could possibly be amidst the surprising coronavirus pandemic that despatched shockwaves all through the economic system and world,” stated John Gabbert, founder and CEO of PitchBook. “Regardless of the uncertainty, we noticed the best ever recorded funding, exit and fundraising values in 2020 and as COVID-19 vaccines roll out and traders begin to return to pre-pandemic behaviors, we anticipate this momentum to proceed all through 2021.”
Exit Exercise
Mixture exit worth in This autumn 2020 reached $138.2 billion, bringing the annual complete to $290.1 billion and surpassing the historic complete of 2019. Exit worth was propelled largely by the opening IPO window within the second half of the yr, whereas exit rely remained basically flat at an estimated 1,101. The energy of the enterprise exit surroundings was not remoted to IPOs, as M&A and buyout exercise additionally proved resilient in 2020, particularly on an exit rely foundation. Much like 2019, one other spherical of huge IPOs drove complete exit worth as many corporations comprising the early unicorn craze lastly sought liquidity. Noteworthy public listings final yr yr embrace Airbnb, Snowflake, DoorDash, Unity, Root Insurance, Palantir, and Asana. SPACs, one of many predominant alternate options to the normal IPO, had a outstanding yr. In comparison with 2019, the variety of public listings of SPAC autos quintupled to 250, recording a 579.6% leap within the worth raised at $75.1 billion. Over the following few years, the SPACs raised in 2020 will buy VC-backed corporations, offering one other exit route going ahead and boosting future exit values. The opposite predominant various, direct listings, managed to have a profitable yr, albeit with much less hype. Palantir and Asana each went public through this route in 2020, marking the primary yr by which there have been a number of billion-dollar direct listings. Given each corporations achieved optimistic leads to the aftermarket, they may encourage broader adoption of direct listings.
Funding Exercise
In This autumn 2020, $38.8 billion was invested into US startups, totaling $156.2 billion invested final yr, up from $138.1 billion in 2019 and topping $150 billion for the primary time ever. The earliest phases of enterprise had been essentially the most jeopardized on the outset of the pandemic, however as exercise surged in This autumn, the angel and seed market confirmed to be close to totally adjusted to the brand new market dynamics, with deal exercise at these phases reaching their highest stage since Q2 2015, in accordance with PitchBook’s deal estimation methodology. The early stage market completed the yr robust with $41.8 billion in funding, surpassing the $40 billion mark for the third consecutive yr. On the late stage, traders deployed over $100 billion in a single yr to late-stage corporations for the primary time ever. Late stage funding represented 66.7% of complete US VC deal worth in 2020, the best proportion since 2007. Mega-deals ($100M+) additionally achieved a file 321 offers closed in 2020, accruing a complete of $70.9 billion, which surpasses the earlier file of $64.6 billion set in 2018. Nontraditional enterprise funding had a banner yr regardless of many predicting a pullback even earlier than COVID-19’s influence. An estimated 3,976 offers with nontraditional investor participation closed in 2020, up 11.7% year-over-year. Nontraditional traders are additionally now main, or solely financing, offers at a better tempo than ever earlier than, having led greater than 1,500 offers in 2020 for the third consecutive yr. Massive companies strengthened their dedication to company VC (CVC) funding with Q3 and This autumn 2020 recording the best variety of offers with CVC participation in PitchBook’s dataset.
Fundraising Exercise
VC corporations raised a file $73.6 billion in 2020 throughout 321 funds, eclipsing 2018’s earlier file of $68.1 billion. Each the median and common VC fund sizes skilled notable jumps, rising to $76.0 million and $235.8 million, respectively. The dwindling variety of autos raised final yr was partially chargeable for the growing fund sizes, with 2020 prone to file the bottom rely in seven years. There was a big fundraising bifurcation in 2020 between established VC corporations (people who have raised 4 or extra funds) and rising VC corporations (people who have raised three funds or much less). Established corporations had been way more profitable than rising corporations and represented greater than 70% of complete capital raised for the primary time since 2014. In distinction, the variety of first-time funds closed in 2020 hit a seven-year low of solely 50, and these autos raised simply $3.9 billion complete, far under the $6.0 billion and $10.8 billion raised by first-time funds in 2019 and 2018, respectively. As regards to mega-funds ($500M+), VC corporations closed a file 44 autos in 2020, practically doubling the 24 closed in 2019. Notable VC mega-funds that closed in This autumn embrace a pair raised by Andreessen Horowitz (a $3.2 billion LSV Fund II and a $1.3 billion flagship Fund VII), Lead Edge Capital’s Fund V of $950.0 million and Canaan Partners’ Fund XII of $800.0 million.
The total report will embrace the next parts:
- Govt abstract
- NVCA coverage highlights
- Overview
- Angel, seed & first financings
- Early-stage VC
- Late-stage VC
- Offers by area
- Offers by sector
- SVB Why SPACs now? :
- Feminine founders
- Nontraditional traders
- Velocity World: Sluggish the money burn for portco world enlargement
- Exits
- Fundraising
- Methodology
To obtain the complete report, click here.
About PitchBook
PitchBook is a monetary knowledge and software program firm that gives transparency into the capital markets to assist professionals uncover and execute alternatives with confidence and effectivity. PitchBook collects and analyzes detailed knowledge on your complete enterprise capital, personal fairness and M&A panorama—together with private and non-private corporations, traders, funds, investments, exits and folks. The corporate’s knowledge and evaluation can be found by means of the PitchBook Platform, trade information and in-depth studies. Based in 2007, PitchBook has workplaces in Seattle, San Francisco, New York and London and serves greater than 45,000 professionals around the globe. In 2016, Morningstar acquired PitchBook, which now operates as an unbiased subsidiary.
About Nationwide Enterprise Capital Affiliation
The Nationwide Enterprise Capital Affiliation (NVCA) empowers the following era of American corporations that may gasoline the economic system of tomorrow. Because the voice of the US enterprise capital and startup neighborhood, NVCA advocates for public coverage that helps the American entrepreneurial ecosystem. Serving the enterprise neighborhood because the preeminent commerce affiliation, NVCA arms the enterprise neighborhood for achievement, serving because the main useful resource for enterprise capital knowledge, sensible schooling, peer-led initiatives, and networking. For extra details about NVCA, please go to www.nvca.org.
Quote Sheet
Devika Patil, Managing Director of Enterprise Capital Relationship Administration at Silicon Valley Bank
“Within the months forward, we’re positive to see new iterations, methods, and rules round exit methods evolve. Whether or not traders search to appreciate worth now or down the street, M&A, IPOs, and SPACs will play a task. From our perspective, it’s advantageous to have capital move choices and innovation in fundraising with new or revised approaches, particularly in a time of big demand for brand spanking new options to handle world challenges.”
Rob Wellner, Chief Income Officer at Velocity Global
“The rebound of VC deal counts in This autumn, significantly for early-stage corporations, gives optimism for corporations’ world enlargement. World demand for tech services and products elevated amidst the pandemic, and VC funding will fund development to worldwide markets. Versatile enlargement choices allow portfolio corporations to hurry market entry, gradual the money burn fee, however permit them to pivot if market situations change . With vaccines rolling out, now could be the time to check markets and spend money on success.”
Joe Horowitz, Managing Normal Accomplice at Icon Ventures
“Tragic because the pandemic has been, it has created a world have to re-think and re-set many practices and behaviors. This has spurred vital demand for brand spanking new modern options and a digital acceleration, fueling the tempo of enterprise capital funding.”
Patricia Nakache, Normal Accomplice at Trinity Ventures
“The file ranges of complete exit worth, deal worth, and capital raised this yr display how the enterprise capital trade managed to pivot and adapt shortly and efficiently to modifications prompted by the pandemic. Early in 2020, managing reserves and making certain there was sufficient dry powder had been high of thoughts. However lots of sectors bounced again in a short time, and with a wholesome IPO market and the fast evolution of SPACs, the trade is primed to start 2021 in a powerful place.”
SOURCE PitchBook
