An incredibly strong exit market, high valuations, and a highly competitive market for VC deals helped drive VC funding in the US through the roof in Q1’21, with US VC-backed companies raising $69.0B across 3,042 deals. Increasing vaccine distribution and the sense of a light at the end of the pandemic tunnel likely also contributed to a strong sense of optimism in the US during the quarter.
The quarter saw continued increased investment in tech companies experiencing a rapid acceleration because of the pandemic. That included platforms based on consumer-focused digital solutions –from edtech and gaming to digital health services. Fintech was also big winner during Q1’21, in addition to logistics, food delivery, and B2B solutions.
Venture-backed exit activity remained nearly as high as it was in the final quarter of 2020, and value notched its third consecutive quarter exceeding $100 billion. Much of this flood of liquidity is being driven by opportunistic debuts into public markets, with equities exhibiting a period of uniquely strong performances. Special purpose acquisition companies (SPACs) continued to attract significant attention as exit interest remained high in Q1’21 and continued to gain ground in the US as an alternative to traditional IPO exits.
“There continues to be enormous amounts of capital looking for a home – and a significant appetite for public issuances. In addition to traditional IPOs, the SPAC phenomenon continues to accelerate – including companies availing themselves of SPACs as a way to go public sooner than they may have initially planned. It remains to be seen if all of these companies will be able to effectively function as a public company."
— Conor Moore, National Leader, KPMG Private Enterprise
In the US in Q1'21
VC-backed companies raised $69.0B across 3,042 deals
Late stage median deal size reaches $14M
Corporate VC surges to over $30B invested across participating rounds
Exits continue at elevated pace, with SPACs attracting significant attention
Source: Venture Pulse, Q1'21, Global Analysis of Venture Funding, KPMG Private Enterprise. Data provided by PitchBook, April 21, 2021.
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About the Pulse Series
The Pulse Series of reports—Venture Pulse and the Pulse of Fintech—analyze the latest global and regional investment trends and insights. Included in the reports we provide perspectives and analyses on the lifecycle of venture capital investments as well as overall fintech investment across the Americas, Europe, and Asia. In each report, we share the latest valuations, financing, deal sizes, mergers & acquisitions, exits, corporate investment, and industry trends.
