Monthly Recap January 2021: VC Funding, Just Shy Of $40B, Hits All-Time High And Produces A Record Number Of New Unicorns

Venture funding in January 2021 hit at an all-time monthly high of $39.9 billion, an analysis of Crunchbase data shows. 

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January’s funding total topped the previous monthly high of the last two years; July 2020 at $38.5 billion. A larger proportion of dollars in these funding spikes was also invested in late-stage venture capital — around 69 percent — with the lion’s share of capital going to Series C+ and private-equity rounds in venture-backed companies. 

Sectors which grew in January include delivery, robotics, logistics, automotive, fintech, and cloud computing. 

Private equity adds new portfolio companies

The most active private equity and alternative investors, including Insight Partners, Tiger Global Management, Coatue, T. Rowe Price and BlackRock, had close to equal or the majority of investments in new portfolio companies. 

The most active venture capital firms — namely Andreessen Horowitz, Accel, New Enterprise Associates, Lightspeed Venture Partners, Index Ventures, Khosla and Bessemer Venture Partners — primarily invested in existing portfolio companies in January. 

This was not the case in prior months with venture capital firms actively seeking out new investment opportunities in private companies experiencing increased consumer demand during the pandemic. GV, the venture arm of Alphabet, and GGV Capital are the two multistage venture firms that invested in a greater number of new portfolio companies than existing follow-on investments last month.

Rounds $100 million and above rise significantly

The number of $100 million-plus funding rounds shot up in January, an all time record, according to Crunchbase data. The largest funding rounds went to Michigan-based electric vehicle company Rivian ($2.65 billion), self driving technology company Cruise ($2 billion) headquartered in San Francisco, Hong Kong-based logistics delivery company Lalamove ($1.5 billion), and Robinhood, the Silicon Valley-based day trading app at the center of the controversy around the stock-price surges in GameStop and other companies ($1 billion). Robinhood went on to raise another $2.4 billion in early February. 

New unicorns at the highest count per month ever

New unicorns joined Crunchbase’s Unicorn Board in January at a dizzying clip of more than one each day — the highest count of new unicorns in a month ever. The U.S. alone had 23 new unicorns join the board last month, with the largest valuation at $4 billion for  Zapier in a secondary investment led by Sequoia Capital. Atlanta’s Calendly was the second most highly valued new U.S.-based unicorn, having raised a Series B of $350 million led by OpenView. 

China created four new unicorns last month. The most highly valued of those was Hive Box, a logistics startup with package drop-off and pickup stations across the country. Germany added three new unicorns, including its most highly valued new unicorn, startup fintech Mambu at $2.1 billion.

Public market debuts

On the public markets front, point-of-sale loans company Affirm — which delayed its initial public offering in December — finally went public last month, raising $1.2 billion and soaring on the first day of trading. Clover Health merged with Chamath Palihapitiya’s special purpose acquisition company Social Capital Hedosophia III at $3.7 billion. And fashion reseller Poshmark, based in the Silicon Valley, went public at $3 billion,  raising $277 million. 

The fastest to go public was RELX Technology, which is based in Beijing and was just founded in 2018. The second-fastest to IPO was cancer therapy company Gracell Biotechnologies from the Jiangsu province in China, a company founded in 2017. 

Mergers and acquisitions

Overall, M&A activity was up when assessed by price during 2020. Month over month, M&A counts were up, reaching 193 in January 2021 — an all time high — with January 2019 the second-highest month for acquisition counts per Crunchbase.  M&A tracked at $16 billion in January 2021, the fifth-highest monthly amount in the past two years for acquisitions with disclosed prices.

The largest acquisition of a venture-backed company last month was for work collaboration company Wrike, which was purchased for $2.3 billion by Citrix Systems. In the semiconductor industry, Qualcomm acquired Nuvia, a startup chipmaker founded by Apple engineers. 

Twitter acquired three companies: Breaker in the podcast discovery space; Revue, a newsletter tool; and Ueno, a digital agency. The acquisitions point to Twitter’s increased push to shape itself into a broader  content delivery platform as news disaggregates. Also during the month, venture firm Andreessen Horowitz announced its intention to become a media outlet, and Substack has become a home to more journalists venturing out on their own. 

Two other acquisitions in the content space were Toronto-based story-telling platform Wattpad, acquired by South Korea-based Naver Corp. for $600 million, and Chicago-based financial “edutainment” company tastytrade, which was acquired by IG Group in the U.K. for $1 billion.  

North America and Europe saw an increase

Venture investment in both North America and Europe trended up last month, a peak for both continents over the last two years. In North America, $24 billion in venture capital was deployed and in Europe $6.3 billion was invested in January, per Crunchbase data. 

In summary

In the last three years, we have seen the opening up of the IPO markets for tech companies. Out of the 10 most highly valued companies at IPO, three debuted in 2020 and two more have already debuted in 2021. And with January posting funding and unicorn-creation records across the board, 2021 is already shaping up to be a blockbuster year for the venture-backed world. 

Methodology

Pro tip: Crunchbase Pro allows users to easily query the dataset. Here are some useful queries used in this report. See the Crunchbase Pro list for January global funding information. Pro users can save the list to their account, filter by location and match it against target customers.

View the full list of private unicorns here and the list of emerging unicorns here.

Learn about companies that recently went public, and perform Pro searches for recent venture-backed acquisitions here.

All 2021 unicorn IPOs are listed here.

Funding rounds included in this report are seed, angel, venture, corporate-venture and private-equity rounds in venture-backed companies. This reflects data in Crunchbase as of Feb. 3, 2020.

Please note that 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.

Illustration: Dom Guzman