Global Venture Funding And Unicorn Creation In 2021 Shattered All Records  – Crunchbase News

Venture funding in 2021 broke records across the board, Crunchbase data shows, with investment last year up more than 10x what it was a decade earlier.

Global venture investment last year totaled $643 billion, compared to $335 billion for 2020—marking 92 percent growth year over year.

The figures underscore a dramatic change in the startup funding environment in the past year. Consider that at the end of 2020, almost a year into the pandemic, global venture investment had grown around 4 percent year over year.

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Amid 2021’s meteoric increase in funding, late-stage and technology growth-stage startups raised $196 billion more than in the previous year, for a total of $413 billion in global venture funding raised at Series C or later.

Early-stage startups, meanwhile, raised $100 billion more last year than in 2020, collectively raising $201 billion, Crunchbase data shows. Seed-stage startups raised $10 billion more in funding in 2021, for a total of $29.4 billion.

Unicorn startups—those private companies valued at $1 billion-plus—were minted at an unprecedented pace in 2021, averaging more than 10 each week.

Financial services raised more venture investment in 2021—the most year-over-year growth among leading industries—than any other sector, followed by health care, e-commerce and transportation.

Less than a decade ago, annual global funding totals were well below $100 billion. In 2012, less than $59 billion in venture capital was invested globally.

Since 2018 global funding has grown 5x larger than it was in 2012.

And last year? Global venture investment in 2021 was more than tenfold that of  2012.

Venture funding to Latin America’s startups grew the most in 2021, with close to $19.6 billion invested in the region, or more than 300 percent year-over-year growth. Funding to European startups grew by more than 150 percent year over year, with close to $116 billion invested. The largest regions for funding remain North America, with $330 billion invested (91 percent growth year over year), and Asia with $165 billion invested (50 percent growth year over year).

Deal volume

The pool of startups raising funding in a given year has also grown. Since 2012, the number of unique startups funded on an annual basis has more than doubled, per Crunchbase data.

Late-stage funding

Consistent with prior years, late-stage and technology-growth funding raised the lion’s share of dollars in 2021. Close to two-thirds of all dollars invested went to more than 3,000 unique companies globally at Series C or later.

The number of startups raising late-stage funding rounds increased significantly in 2021. Counts and unique startups funded grew more than 50 percent, with 1,000 more startups raising Series C or later fundings in 2021 than in 2020, Crunchbase data shows.

Early-stage funding

From a dollar perspective, early-stage funding showed the greatest increase, at 100 percent growth year over year. Early-stage funding reached $201 billion invested in 8,000 companies last year, compared to $101 billion in 2020 to more than  6,500 companies.

Seed funding

Seed funding grew 56 percent year over year and totaled $29.4 billion in 2021, per Crunchbase data, with more than 17,000 startups around the world raising funding at seed. It’s worth noting that seed funding rounds are where we tend to find the largest lags for this data to enter the Crunchbase dataset, so those figures will likely go up.

Unicorn counts breach 1,000

Alongside this growth in overall funding, the Crunchbase Unicorn Board reached 1,000 concurrent private companies for the first time in 2021, then shot past that number. There are currently 1,148 companies on the Unicorn Board, which also added around $1.8 trillion in value in 2021 compared to its value toward the end of 2020.

New unicorns joined our board at a dizzying pace, with 586 new entrants—averaging more than 10 new unicorn startups per week. For comparison, 2020 minted 167 new unicorn companies, averaging three per week.

These unicorn companies have now raised a total of $682 billion over time, and are collectively valued at $3.8 trillion—an all-time high for the Crunchbase Unicorn Board.

Record year for the public markets

A record number of venture-backed companies also went public in 2021. Many of them went public at huge valuations, with 238 companies debuting on the public markets valued above $1 billion in 2021, compared with 61 in 2020.

A record number of companies went further, with 35 debuting above $10 billion in 2021 compared to 13 in 2020. 

In summary

Unparalleled venture investment went into technology startups in 2021, due to the ongoing impact of the pandemic, the corresponding shift to cloud services, and the opening up of the public markets. Investors followed these trends with private equity investing at an extraordinary rate.

In 2021 alone, Apple added $1 trillion in value, with its market capitalization topping $3 trillion on the first trading day of 2022. Both Google parent Alphabet and Amazon were each valued at $1 trillion toward the end of 2020, with each adding  almost a trillion more in value last year.

Not all technology companies performed as well as these leading companies in 2021, but the value created by new technology IPOs is unprecedented.

Looking forward, the growth in early-stage funding predicts a strong venture funding environment in 2022 as these companies continue to grow. And with more than 1,100 companies on the Crunchbase Unicorn Board as we start the new year, expect quite a few more to list in 2022.

Methodology

The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of Jan. 4, 2022.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

All funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.

Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million.

Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)

Illustration: Dom Guzman