Friday, February 3, 2023

Venture Funding soared to a record $64 Billion n Q1

After the immense success of Venture Capital in 2020 amid the pandemic, it is starting 2021 in a resounding way. While most of the investors are funding various sectors such as food delivery, online brokerages, or if we talk Elon Musk’s SpaceX, it combined leads to an evident and record-breaking increase., of $64 Billion in venture capital in the very first quarter of 2021, according to analysis reports from  Ernst&Young. A disastrous pandemic situation like Covid-19, it seems to be a very favorable and excellent scenario for venture companies. Top Venture Capital deals in the first quarter of 2021 include.

§  Gopuff – $1.2 Billion

§  Cruise – $2 Billion

§  Robinhood – $1 Billion

§  Databricks – $1 Billion

§  SpaceX – $850 Million

§  Stripe – $600 Million

§  UI Path – $750 Million

§  Thrasio – $750Million

It combinedly equals 43% of the overall funding in 2020 which was already a great year in similar terms, i.e., $1.48 Billion. With this rapidity, it will soon become the 4th year to cross the mark of $100 Billion or more if it carries on with the same velocity.

Venture Capital Funding is the investment in which various small and medium sector start-ups can raise funding without even starting their market operations in search of high payout and revenue at the end. There are multiple types of industries such as  Biotech, peer-to-peer financing, dotcom, and many more, in which venture capital funds are being used. Venture Capital companies include a very high growth potential but come up with an increased risk. According to Grabow, U.S. Venture Capital leader at Ernst & Young, A total of 183 venture deals took place in quarter 1 of 2021, in which every deal is valued at at least $100 Million.

The biggest one is Cruise- an autonomous car company that got a 2 Billion USD deal from Microsoft according to their agreement with General Motors. Second-biggest venture investment consists of $1.2 Billion raised by Gopuff- a digital convenience store. Investing app Robinhood and Data analytics software Databricks come up in a third and fourth place with an investment of $1 Billion each. Elon Musk-owned private space company SpaceX comes in 5th. LEDs up venture capital of $850 Million, making its overall valuation $74 Billion., “A year ago everybody thought we were sliding into the abyss. To have a record quarter like this is pretty amazing”, Grabow said. Stripe’s payment software company raised $600 Million in a Series H round, making its overall valuation $95 Billion.

If we compare it with the first two quarters of 2020. It is relatively slower in 2020 as many start-ups got affected by the pandemic and dropped their plans. Now looking back at the situation, it seems unbelievable as besides dealing with covid-19, the industry has shown remarkable performances. The market has plans to expand its capital funding by offering IPOs from Snowflake, Doordash, and Airbnb. One recent example is Uber which raised $20 Billion through a venture capital-funded IPO. A Venture capital-based Initial public offering is when a private investor-backed and funded company starts investment through venture funding operations. The offering of an IPO solely depends on the perfect time for the maximum revenue so that the capitalists can start an IPO.

Along with these big deals, smaller funding deals are also making their way to the top. With this rate of emergence of capital in venture firms through the online meeting platform Zoom. The industry is breaking its record of growing at a speedy pace. Grabow said that funds such as AngelList started to allow people to tie up with investors for their start-ups. These venture capital investments often clash with Special Purpose Acquisition Companies (SPAC). Special Purpose Acquisition Companies are blank-check firms that change private entities to make them public after attaining them. According to SPACinsider, the total funding capital raised by these SPACs is $98.9 Billion, a record-breaking number to date. But as this is venture capital, this also comes up with many risks along with high revenue and productivity. Now the question, according to Grabow, is whether 2021 will become $200 Billion capital.


Please enter your comment!
Please enter your name here


Hot Topics

Related Articles