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ANALYSIS: Billion-Dollar VC Fundings Made for Record Q1

April 7, 2021, 11:01 AM

Global venture capital investment volume hit a record high last quarter, boosted by a group of 29 large deals. While accounting for less than 1% of the quarter’s total deal count, these large deals represented more than 22% of the quarter’s total deal volume. Amounting to $29 billion in total, these 29 individual VC fundings ranged in value from $500 million to $3.4 billion. In contrast, the vast majority of the nearly 3,000 funding rounds announced in Q1 for which financial data was disclosed were valued under $500 million each.

Among the largest VC investments from last quarter were the $3.4 billion Robinhood Markets Inc. funding, the $2.65 billion Rivian Automotive Inc. funding, the $2 billion Cruise LLC funding, and the $1 billion Databricks Inc. funding. The total volume of deals valued at $1 billion or greater was $14 billion last quarter.

Can venture capital fundings get any bigger? They have occasionally reached this size in the past, but only 10 deals in the past six years have surpassed last quarter’s Robinhood Markets Inc. funding value. Most of those deals, except for the unusually large $14 billion funding round received by Ant Group Co. Ltd. in 2018, were in the $4 billion-to-$5 billion range.

Overall, $132.4 billion in global VC investments were announced in the first quarter and are either currently pending or completed. This total volume marks a 151% increase over the first quarter of 2020 and, according to Bloomberg data, is the highest aggregate volume of venture capital investments seen in any quarter on record.

Of these first-quarter global venture capital investments, $53.1 billion involved targets in the technology sector, a 174% year-over-year increase in volume for that sector and also the highest quarterly tech VC volume on record.

At the top of the investors list for the first quarter was Sequoia Capital Operations LLC, with 75 fundings valued at a total of $14.5 billion, with an average deal size of $219 million.

Where is venture capital headed? Targets in the software industry ($49 billion), biotech industry ($10.6 billion), and internet industry ($15.4 billion) received the most funding of all industry groups in the first quarter. This level of investment may signal a continuation of pandemic investment trends. Overall, if VC investment volume continues for the remainder of the year and beyond the pandemic, it would arguably mark a significant shift in investment trends and a new era for venture capital.

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