VC Secular Tailwind

At the half-year mark in 2021, the VC market is breaking all time records:

1) More than $288B was invested in VC worldwide — the prior peak was $179B in the second half of 2020. Late-stage funding peaked the most, more than doubling year over year

2) 250 companies have become unicorns (65% headquartered in the US), compared to 161 new unicorns for the whole of 2020. There are now 879 unicorns collectively valued at close to $3T that have altogether raised $564B — 17 companies have raised rounds above a billion dollars through the first half of 2021

3) The number of VC exits reached 883 deals, which already represents 75% of the all-time yearly high set in 2019

4) In addition, US venture-backed startups were buying other startups at the fastest pace ever – 268, whereas the previous highest was 204 in 2016

More amazingly, this record-breaking totals should become the new normal, at least for the next years.

Given the potential deals in the pipeline, all signs are pointing to a long run of richer exit years, potentially curbing any possible market correction. Liquidity should flood the markets through big IPO waves, as there are still 181 unicorns that were founded 10 or more years ago.

Last year, total VC exit value in the US reached a new high of some $287B, led by the public debuts of Airbnb and Snowflake. In 2021’s first half alone, the exit market has already blown away last year’s record, with $372B in total IPO value, led by Coinbase and Roblox.

In addition, nontraditional investors (corporate VCs, hedge funds, PE firms) have now between $250B and $350B to invest in the global venture market, effectively doubling the capital available to VC-backed companies.

Conclusion

The range of VC investment opportunities is extraordinarily wide.

A Silicon Valley-epicentered VC tailwind is blowing strong and should continue to blow strongly for the next years.

Sail along with Fabrica Ventures.