- At the start of 2022, venture-capital funding is greater than it’s ever been.
- In 2021, Global VC funding almost doubled from 2020 to well over $600 billion.
- Early-stage funds increased 100 percent over last year, the area with the greatest gains.
By the third quarter of 2021, venture capital was already having a record-breaking year.
Now that full-year totals have been tabulated, it’s clear that the leap in venture-capital investing was truly jaw-dropping. And there are already signs that 2022 may remain equally hot.
Global venture-capital firms invested $643 billion into startups in 2021, Crunchbase said. This compares to $335 billion in 2020, marking a 92 percent increase.
These numbers are in line with PitchBook’s reports as well. It found $671 billion in global venture deal flow in 2021, compared to $346.7 billion in 2020.
US venture investment made up a little less than half of the global total with $329.9 billion invested in 2021, PitchBook said. That’s almost double last year’s total of $166.6 billion.
And US VCs raised more than $128 billion for their funds during 2021, so their coffers are still full of cash.
Fintech startups raised more venture investment than all other sectors, followed by healthcare, e-commerce, and transportation startups, Crunchbase said.
Late-stage startups, not surprisingly, received the largest share of these funds, with $413 billion raised in Series C or later across 3,735 deals. This much investment also meant that the number of unicorn companies skyrocketed, with 586 companies reaching valuations of $1 billion or more this year. Of these unicorns, 340 were in the US.
In addition to raising new funds, VCs refilled their coffers as a record number of unicorns went public: 238 venture-backed companies debuted on the public markets in 2021 that were valued above $1 billion at the time of their initial public offerings, Crunchbase said.
But it was the early-stage market that saw the largest increases proportionately from last year.
Early-stage startups raised $201 billion across 9,030 deals, with $61.1 billion raised in Q4 alone, Crunchbase said. That’s $100 billion more than last year’s total of $101 billion, basically doubling over the last year.
The youngest startups, raising seed rounds, also raised $10 billion more in funding in 2021 than in 2020, for a total of $29.4 billion across 19,291 deals, or a 56 percent increase. Crunchbase said 2021 seed funding data was not final yet, so this total could go up even further as more information is reported.
Plus, with big names such as Andreessen Horowitz, Greylock, and Khosla Ventures all announcing large dedicated seed funds in 2021, seed-stage investing may stay hot in the new year as well.
While there’s some speculation that this massive flow of money will start to slow down, recent fundraising announcements from big firms such as A16Z signal that there’s still plenty of bulls in the venture market, and 2022 may be another huge year.