FOR IMMEDIATE RELEASE
July 14, 2021
Contact: Sabrina Fang
Phone: 703-283-2091
Email: sfang@nvca.org
SEATTLE, July 14, 2021 – U.S. venture capital activity was up across all phases of the ecosystem in the first half of the year, according to the PitchBook-NVCA Venture Monitor, the authoritative quarterly report jointly produced by PitchBook and the National Venture Capital Association with support from Silicon Valley Bank.
FOR IMMEDIATE RELEASE
April 14, 2021
Contact: Devin Miller
Phone: 703-300-5232
Email: dmiller@nvca.org
SEATTLE, April 14, 2021 – Venture capital (VC) dealmaking started strong in the first quarter of 2021 with an uptick in mega-deals and increased participation of nontraditional investors, according to the PitchBook-NVCA Venture Monitor, the authoritative quarterly report on venture capital activity in the entrepreneurial ecosystem jointly produced by PitchBook and the National Venture Capital Association (NVCA), with support from Silicon Valley Bank and Secfi. The proliferation of mega-deals ($100 million+), once considered to be anomalies a few years ago, have become commonplace. In fact, mega-deal value in the first quarter of 2021 already accounts for over half of all mega-deal investments from the full year 2020. While much of the world has yet to return to a pre-pandemic normal, angel, seed and early-stage deal activity is seeing sustained momentum in line with the last few years. Many of 2020’s fundraising tailwinds continued into 2021, and the uptick in mega-funds ($500 million+) further cemented the success that established managers have found during the pandemic. On the liquidity side, VC-backed exit activity remained strong in the first quarter due to robust activity on the broader public listing market. While direct listings have remained slightly under the radar, there are a handful of multi-billion-dollar direct listings expected to close in the coming year and this route to liquidity could continue to be utilized by the most valuable VC-backed businesses due to both time and cost savings.
FOR IMMEDIATE RELEASE
March 25, 2021
Contact: Devin Miller
Phone: 703-300-5232
Email: dmiller@nvca.org
WASHINGTON, DC – The U.S. venture ecosystem ended 2020 with more than 10,800 companies across the country receiving venture funding and approximately 1,965 VC firms managing 3,680 venture funds with $548 billion in assets under management (AUM), according to the National Venture Capital Association (NVCA) 2021 Yearbook, with data provided by PitchBook, released today. The NVCA 2021 Yearbook is an annual publication documenting trends and analysis of venture capital activity in the U.S. from the past year and presents historical data and information about venture’s role in fueling entrepreneurship in America.
FOR IMMEDIATE RELEASE
March 3, 2021
Contact: Devin Miller
Phone: 703-300-5232
Email: dmiller@nvca.org
WASHINGTON, DC – Amid heightened efforts to promote increasingly diverse, equitable and inclusive workforces over the past year, venture capital (VC) firms are taking note of their social and corporate responsibility in achieving greater gender, racial and ethnic diversity. These key findings are from the third edition of the VC Human Capital Survey, powered by the National Venture Capital Association (NVCA), Venture Forward, and Deloitte.
FOR IMMEDIATE RELEASE
January 14, 2021
Contact: Cassie Ann Hodges
Phone: 202-864-5923
Email: chodges@nvca.org
SEATTLE, January 14, 2021 – Though the past year had a lot of uncertainty brought on by the coronavirus (COVID-19) pandemic, the US VC industry demonstrated its resilience and long-term mindset, achieving new records in total exit value, deal value and capital raised by VC funds, according to the PitchBook-NVCA Venture Monitor, the authoritative quarterly report on venture capital activity in the entrepreneurial ecosystem jointly produced by PitchBook and the National Venture Capital Association (NVCA), with support from Silicon Valley Bank and Velocity Global. The US VC liquidity market exceeded expectations in 2020, with a group of massive IPOs driving exit value over 2019’s strong showing. 2020 seemed to mark an inflection point in determining other feasible options for startups looking to go public, most notably the soaring number of public listings of special purpose acquisition company (SPAC) vehicles last year. On the dealmaking side, the earliest stages of venture were hit hard at the outset of the pandemic as sourcing, diligencing, and investing in these companies went fully online after years of leaning on in-person connections to close deals. While late-stage companies have been the strongest piece of the venture ecosystem in 2020, early stage activity rebounded over the second half of the year. Many in the industry assumed nontraditional investors would pull back from VC during the pandemic-induced crisis, but participation has only strengthened. The robust exit market from the past two years will continue to drive distributions back to LPs, reaffirming allocations to the strategy. VC fundraising activity remained a hallmark of strength in 2020 bolstered by public market liquidity from a strong IPO market, near-zero benchmark interest rates, and the large number of LPs underallocated to venture coming into the year.
FOR IMMEDIATE RELEASE
October 13, 2020
Contact: Cassie Ann Hodges
Phone: 202-864-5923
Email: chodges@nvca.org
SEATTLE, October 13, 2020 – Though external economic headwinds due to the coronavirus pandemic persisted in the third quarter, venture capital (VC) exit activity saw a major uptick, achieving the second highest exit values on record, according to the PitchBook-NVCA Venture Monitor, the authoritative quarterly report on venture capital activity in the entrepreneurial ecosystem jointly produced by PitchBook and the National Venture Capital Association (NVCA), with support from Silicon Valley Bank and Certent. The positive momentum from the stock market in recent months, particularly the performance of new listings, has encouraged companies to move forward with IPOs if they were prepared and considering that exit route. On the dealmaking side, this report includes PitchBook’s proprietary deal estimation methodology for the first time, which will be included in all future reports, to better account for investment data reported after the quarterly publication date. Investors have continued to consolidate capital into their most valuable and mature businesses leading to a consistently high volume of VC mega-deals. The explosion of this slice of the VC ecosystem has been one of the most drastic changes over the last 10 years and has actually ramped up throughout the COVID-19 pandemic. One big reason behind the increase is that nontraditional involvement, including sovereign wealth funds, mutual funds, and hedge funds, has remained in play despite the economic slowdown. Fundraising activity remained strong in the third quarter, putting 2020 on track to set a record high for total capital raised. As the COVID-19 pandemic progressed, fund managers with established LP relationships and a record of strong fund performance have not experienced many hiccups when it comes to raising new funds.
FOR IMMEDIATE RELEASE
July 14, 2020
Contact: Cassie Ann Hodges
Phone: 202-864-5923
Email: chodges@nvca.org
SEATTLE, July 14, 2020 – Despite external economic headwinds, venture capital (VC) fundraising activity exhibited strength in Q2 2020 while exit and dealmaking activity slowed due to the impacts of the coronavirus pandemic, according to the PitchBook-NVCA Venture Monitor, the authoritative quarterly report on venture capital activity in the entrepreneurial ecosystem jointly produced by PitchBook and the National Venture Capital Association (NVCA), with support from Silicon Valley Bank and Certent. The ten largest funds raised in the first half of the year made up over half of all VC fundraising value so far. Many of these funds likely began fundraising before the uncertainty of the coronavirus pandemic affected the markets, but closing such massive vehicles remains an impressive feat. Exit activity continued its pandemic-induced struggle during the second quarter, with exit count in 2020 tracking to be the lowest since 2011. With this significant reduction in the number of companies achieving liquidity for investors, there could be serious implications for the rest of the VC ecosystem in the coming years. On the dealmaking side, activity has decelerated rather significantly when looking at figures for the broader industry. However, late-stage financings have outpaced early-stage financings as companies took advantage of high capital availability and investors looked to protect their largest and best investments. While this phenomenon may simply be a COVID-related anomaly in the long term, the high activity at the late-stage is the culmination of many of the recent trends within the US VC industry.
FOR IMMEDIATE RELEASE
April 14, 2020
Contact: Cassie Ann Hodges
Phone: 202-864-5923
Email: chodges@nvca.org
SEATTLE, April 14, 2020 – After elevated venture capital (VC) investment in the past few years, deal activity maintained momentum in the first quarter of 2020 amid the impending economic downturn due to the COVID-19 pandemic, which will slow activity through the rest of the year, according to the PitchBook-NVCA Venture Monitor, the authoritative quarterly report on venture capital activity in the entrepreneurial ecosystem jointly produced by PitchBook and the National Venture Capital Association (NVCA), with support from Silicon Valley Bank and Carta. While the novel coronavirus has sent shockwaves through many areas of the economy, its full effect on VC deal activity has yet to be seen in the data. The early stage saw strong capital investment in Q1, continuing a decade-long rise that seems primed to subside due to the fallout from COVID-19. Many of the VC market dynamics that have supported large deals sizes (i.e. more mature startups, high capital availability) persist in the market today, but recent macroeconomic realities and widespread market volatility will weigh on dealmaking, suppressing deal valuations and shifting terms in favor of investors for the first time in years. Read more
FOR IMMEDIATE RELEASE
March 17, 2020
Contact: Cassie Ann Hodges
Phone: 202-864-5923
Email: chodges@nvca.org
WASHINGTON, DC – The U.S. venture ecosystem ended 2019 with more than 10,400 companies across the country receiving venture funding, approximately 1,300 venture firms managing over 2,200 active venture funds, and more than $444 billion in venture capital (VC) assets under management (AUM), according to the National Venture Capital Association (NVCA) 2020 Yearbook, with data provided by PitchBook, released today. The NVCA 2020 Yearbook is an annual publication documenting trends and analysis of venture capital activity in the U.S. from the past year and capturing historical data and information about venture’s role in fueling entrepreneurship in America.
FOR IMMEDIATE RELEASE
January 14, 2020
Contact: Cassie Ann Hodges
Phone: 202-864-5923
Email: chodges@nvca.org
SEATTLE, January 14, 2020 – By the end of 2019, the venture industry deployed $136.5 billion in US-based companies, surpassing the $130 billion-mark for the second consecutive year, according to the PitchBook-NVCA Venture Monitor, the authoritative quarterly report on venture capital activity in the entrepreneurial ecosystem jointly produced by PitchBook and the National Venture Capital Association (NVCA), with support from Silicon Valley Bank and Carta. Vast amounts of capital resources available continued to drive growth in deal sizes and valuations across all stages. Although venture-backed exit activity cooled off in Q4, 2019 recorded the annual record for US VC exit value at $256.4 billion across 882 liquidity events. This unprecedented flow of capital back to general partners (GPs) and limited partners (LPs) should drive impressive return metrics, encourage more fundraising and increase allocation to VC. Similarly, dealmaking activity should see sustained support from the newly raised funds, as well as nontraditional VC investors attracted by the substantial cash flows. Nontraditional investors, such as sovereign wealth funds and family offices, are more involved in the venture industry than ever before, participating in 85% of the 252 mega-deals (deals over $100 million) recorded in 2019. Female-founded companies saw record activity on both a capital and count basis, and their share of VC dealmaking climbed to an all-time high. On the fundraising side, robust exit activity and increased fund sizes have contributed to drive fundraising to the second-highest annual total in the past decade, with $46.3 billion raised for US venture funds.
To download the full report and data packs, please click here. PitchBook and NVCA will also be hosting a webinar in partnership with Silicon Valley Bank and Carta on February 4, 2020 from 9:00 – 10:00 am PDT. Please click here to register.
“2019 showed that industry trends from the historic 2018 are the new normal for the venture industry, with mega-rounds and mega-funds becoming increasingly common trends in the startup ecosystem,” said Bobby Franklin, President and CEO of NVCA. “While there are lingering uncertainties surrounding global macroeconomic trends, US public policies, and the 2020 election that could impact the industry, the flood of exit dollars going back to LPs, the robust fundraising environment, and large amounts of dry powder available at many venture firms should allow the industry to sustain this new level of investment activity in 2020.”
“Despite uncertainties about the sustainability of the unprecedented activity seen in 2018, this year kept pace and will undoubtedly leave its mark on the venture ecosystem,” said John Gabbert, founder and CEO of PitchBook. “In 2019, we saw the highest exit value ever tracked, record capital deployed to female-founded startups and the most late-stage deals ever closed, to name a few. The continued proliferation of nontraditional investors participating in VC and the need for LPs to recycle distributed capital back into new VC funds should keep venture momentum strong heading into 2020.”
Venture capital deal activity in 2019 kept pace with record levels seen in 2018 for both count and value. Q4 2019 saw $34.2 billion invested across 2,215 deals, totaling $136.5 billion across 10,777 deals in 2019. One factor contributing to the record deal value seen in recent years is the increasing maturity of companies at all stages, underscored by a rise in early-stage mega deals. These transactions – 53 completed in total – represented nearly 25% of all VC mega-deals raised in the year. Another factor underpinning the strong deal value numbers is that investors still appear willing to deploy large sums when attractive opportunities are presented, despite fallout from disappointing IPOs and increased scrutiny of profitability for late-stage companies. Late-stage deal count surpassed 2,500 for the first time ever in 2019, with nearly 2,600 deals totaling more than $85 billion invested. This year also registered the new high for mega-deals at the late stage with 181 deals completed, up roughly 10% year-over-year. Investments with at least one nontraditional investor (hedge funds, sovereign wealth funds, family offices and pensions) nearly surpassed $100 billion for the second consecutive year, helping drive deal value further.
Exit activity in Q4 2019 posted quarter-over-quarter declines for the second consecutive quarter on both a count and value basis, recording 174 exits totaling $18.8 billion. Despite the decline in activity during the back half of the year, 2019 now stands as the annual record for US VC exit value at $256.4 billion across 882 liquidity events. The largest exit in Q4 was PayPal’s $4.0 billion acquisition of Honey Science, a successful exit for backers given the online shopping coupon platform raised only $37.7 million over five rounds prior. IPO activity has been the primary driver behind this record year of exit value, but this liquidity option had an especially tepid Q4. Lackluster post-IPO performance of many newly listed technology companies over the past six months likely put a damper on potential debutantes. Following the aftermarket price performance struggles from 2019 technology listings, healthcare IPOs dominated the Q4 roster. Nine of the 13 VC-backed IPOs from Q4 were healthcare IPOs, representing 69.2% of the total. Amidst scrutiny over the traditional IPO process, the direct listing option gained momentum in 2019 amongst VC investors and founders alike. Looking to 2020, many unicorns pursuing a transition to the public market will likely consider a direct listing.
US venture funds raised $46.3 billion across 259 vehicles in 2019, reaching the second highest annual total in the past decade but posting well below the $58 billion raised in 2018. Despite fund count also seeing a decline from 2018 levels, VC funds have grown larger with the annual median fund size reaching $78.5 million in 2019. Strong distributions and lackluster contributions in the first quarter of 2019 resulted in elevated net cash flows, effectively pooling cash with LPs that are likely to recommit. This pattern could then push 2020 VC fundraising totals near 2018’s historic figures. As the funding environment continues to shift, micro-funds (funds under $50 million) have become less desireable given the struggle to compete or maintain equity stakes, falling to their lowest annual levels in terms of value and volume since 2011. Larger funds allow GPs to write bigger checks and ultimately remain competitive when it comes to dealmaking. There was a notable increase in the volume of funds sized between $50 million and $250 million, commanding 43% of overall fund count in 2019. Twenty mega-funds closed in 2019 with the largest fund of the year being TCV’s 10th Fund, a $3.2 billion vehicle that aims to invest in IT infrastructure and consumer internet companies.
The full report will include the following components:
To download the full report, click here.
Additional Quotes
Greg Becker, CEO of Silicon Valley Bank
“The public markets are increasingly more discerning about the fundamental health of unicorns. Still, for recent IPOs, top-line growth remains highly correlated to a company’s valuation. In fact, the public markets have continued to be receptive to high-growth companies with operating losses. Out of 21 US VC-backed tech IPOs in 2019, seven entered the public markets with a $10B+ market cap on the first day close, compared to just 2 in the previous three years combined. Of course, share prices have tumbled for some of these IPOs, an important reminder that that those seeking to go public shouldn’t ignore the importance of demonstrating a clear path to profitability.”
Mischa Vaughn, Head of Editorial at Carta
“In 2019, the machinations behind venture capital went mainstream. From direct listings and IPOs to subjects like dual-class share structures or ‘supervoting’ shares. Our analysis of single-class and dual-class companies provides new insights to help investors and founders understand the effects of these corporate decisions.”
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About PitchBook
PitchBook is a financial data and software company that provides transparency into the capital markets to help professionals discover and execute opportunities with confidence and efficiency. PitchBook collects and analyzes detailed data on the entire venture capital, private equity and M&A landscape—including public and private companies, investors, funds, investments, exits and people. The company’s data and analysis are available through the PitchBook Platform, industry news and in-depth reports. Founded in 2007, PitchBook has offices in Seattle, San Francisco, New York and London and serves over 32,500 professionals around the world. In 2016, Morningstar acquired PitchBook, which now operates as an independent subsidiary.
About National Venture Capital Association
The National Venture Capital Association (NVCA) empowers the next generation of American companies that will fuel the economy of tomorrow. As the voice of the US venture capital and startup community, NVCA advocates for public policy that supports the American entrepreneurial ecosystem. Serving the venture community as the preeminent trade association, NVCA arms the venture community for success, serving as the leading resource for venture capital data, practical education, peer-led initiatives, and networking. For more information about NVCA, please visit www.nvca.org.
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