With the unprecedented loose monetary policy and excess liquidity trend of central banks, the epidemic has not hindered the pace of venture capital in 2021.
Although the statistical methods are different, many analysts have reached a more consistent conclusion: global venture capital financing will set another record in 2021. According to a recent report from VC database CB Insights, global venture capital financing reached $621 billion in 2021, more than double the $294 billion in 2020; the latest report from researchers Dearroom and the London Development Agency (L&P) also shows that the total amount of financing received by start-ups in 2021 reached an unprecedented $675 billion, double that of 2020.
The reports all predict that the "frantic pace of fundraising" is expected to continue this year as VC firms' cash flows remain at historic highs and returns are higher than all other asset classes.
VCs generally choose high-tech startups or unlisted companies with promising business prospects.
These areas became fertile land for capital
Dealroom's report shows that of the record $675 billion in venture capital financing in 2021, nearly $600 billion flowed into Asia, with China at its core, the United States, and across Europe with London as the core.
The U.S. is the most VC-focused region, attracting $329 billion in 2021, nearly half of the world's total venture capital financing; it is closely followed by Asia, which attracts $169 billion; and the European Union ranks third with $115 billion.
The growth rate of venture capital financing in the Asian region was the most significant in 2021, reaching 89%. In Asia, about one-third, a total of $62 billion in venture capital financing flows to China, with Beijing ($13.6 billion) and Shanghai ($13.4 billion) being the most sought-after cities for venture capital. A report by Preqin, a British private investment data firm, also shows a significant increase in the amount of venture capital in China over the past two years. "Unlike the past, venture capital was mainly concentrated in industries such as e-commerce, in 2021, China's venture capital will mainly focus on semiconductors, biotechnology and information technology." The Prechin report reads. According to PitchBook, although it is still unlisted, ByteDance, which is backed by Sequoia, is valued at $180 billion.
In Dealroom's survey of major city clusters, the U.S. cities ranked among the top three cities in terms of revenue absorption capacity, namely the San Francisco Bay Area ($100.9 billion), New York ($47.5 billion), and the Boston Region ($29.9 billion), where Silicon Valley is located. PitchBook and the National Venture Capital Association's statistics show a record 17,054 U.S. venture capital deals in 2021.
In Europe, although facing the double test of the epidemic and Brexit in 2021, the UK has received more venture capital financing in the past year than France, Germany, Sweden and so on.
Which VCs have contributed unprecedented funding in the past year? According to CB Insights, at the top of the list is New York-based Tiger Global. In 2021, Tiger Global Management Fund invested heavily in 328 startups around the world and helped a number of Indian start-ups become "unicorns". CB Insights believes that the number and speed of investment invested by tiger global management funds in the past year has not only surpassed the unicorn investment brother "Sequoia Capital", but also far beyond its own historical level.
Bet on these subdivisions
Cb Insights data shows that under the unprecedented influx of funds, more than $100 million in venture capital financing reached 1556 in 2021, compared with 620 in 2020. The number of unicorns (i.e., private companies valued at more than $1 billion) in 2021 increased by 69% from 569 in 2020 to 959 due to the rapid rise in valuations of late-stage venture capital transactions.
Among them, online payment startup Stripe is completing a new round of $600 million financing, with a valuation of $95 billion, surpassing Musk's Space X (valued at $74 billion) to become the most valuable private company in the United States in 2021. According to US media reports, the company, which has dual headquarters in San Francisco and Dublin, Ireland, has nearly tripled its valuation in one year. According to PitchBook data, Stripe's last reported valuation was in April 2020, when the company was valued at $36 billion. PitchBook believes that more and more people are turning to online shopping during the epidemic, so the demand for Stripe is increasing, pushing up Stripe's valuation.
According to data compiled by Tracexn, overseas funds will invest more than $35 billion in Indian startups in total in 2021, three times as much as in 2020 and equivalent to the sum of the past eight years. GlobalData's analysis shows that India will add 44 new unicorns in 2021, which is more than the previous decade combined.
CBN combed statistics from major institutions and found that in the past year, venture capital firms have increased their bets on areas such as financial technology, healthcare, games and Internet platforms.
Cb Insights' survey found fintech companies to take the lead, receiving $132 billion in venture capital funding in 2021, accounting for 21 percent of total venture capital in 2021, making it the hottest type of venture capital deal. The industry received only $49 billion in venture capital financing in 2020.
CB Insights believes that the investment and financing stage in the financial technology field in 2021 is still dominated by the early stage, with "mega-rounds" (mega-rounds) frequently appearing, reaching 1556 cases, while in 2020, it will only stay at 630 cases, an increase of 147%. This means that the technology sector continues to be bullish, with new investors pouring in to inject vitality into the market.
Over the past year, many have found that by partnering with fintech, investing in, or acquiring fintech, especially when it comes to high-demand skills, efficiencies are better than expected. Many non-financial companies are also expanding into payments and other financial services.
In addition, due to the impact of the global epidemic, health technology companies have become the hottest investment track at present. Previous statistics show that as of December 2021, the financing in the field of medical technology worldwide exceeded 50 billion US dollars, of which telemedicine, online diagnosis, AI technology-led drug research and development, surgical robots, etc. are all popular investment areas. Cartography/Jiang Haoming
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