Global venture capital investments reach $125 billion in the first quarter, the first time the figure has exceeded $100 billion in a quarter, according to new data published today by Crunchbase.
Startup boost
The $125 billion invested in the quarter was up 50% over the fourth quarter of 2020 and increase 94% from the first quarter of 2020. Stressing how rapidly money is flowing, the number of new unicorns, companies with a valuation of $1 billion or more, emerged at a rate of nearly two per day in the quarter. This is far greater figure than the previous records.
The report indicates that the swell of investment comes as the S&P 500 index is also at an all-time high, prompting more companies to go public. This accompanied by a year of strong growth for many startups due to the global pandemic.
Go public without IPO
Furthermore, startups have more avenues to go public, in particular special-purpose acquisition companies. SPACs, though not a new idea, were rare in the tech startup sector a year ago.
However, SPAC have come to the fore and gaining ground as a way for companies to go public avoiding the formal initial public offering process. Instead, a SPAC deal is that a startup would merge with an already listed company, usually with large sums of capital involved in the transaction.
Some of recently announced SPAC deals are delivery service startup Enjoy Technology Inc. in a deal worth $1.6 billion and crowd screening tech firm Evolv Technologies Inc. in a $1.7 billion deal.
Seed funding deals
Other sector that boost up is Seed Funding with deals worth $4.1 billion invested in the quarter, down slightly from $4.2 billion in the previous quarter. Excluding the second quarter of 2020, seed funding has gained ground over the last year by money invested. Early-stage funding in the quarter was $33.5 billion, increase of 45% from the previous quarter and 63% year-over-year.
Late-stage funding shot up from 56% from the previous quarter, to $85.6 billion, also up 122% year-over-year. The report indicates that a high proportion of the growth was in rounds of $100 million and above and responsible for 79% of all late-stage deals.
The number of acquisitions also increased from 26% from the previous quarter and 44% year-over-year, to 631 deals. Major deals in the quarter included GlobalLogic Inc.’s acquisition by Hitachi Ltd. for $9.6 billion and Okta Inc.’s purchase of Auth0 Inc. for $6.5 billion.
