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Monthly Funding Recap October 2020: 14 New Unicorns Are Born And Funding Holds Steady

Global venture funding in October 2020, the first month of the final quarter of the year, held steady at $23 billion and followed a strong third quarter, according to Crunchbase data. At the same time, 14 new unicorn companies were created last month—the second-highest monthly total so far this year—indicating that despite a raging pandemic and uncertainty around the U.S. presidential election, venture investors were continuing to deploy record amounts of cash.

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Key findings

    • Global funding in October 2020 came in at $23 billion, up 3 percent from October 2019.
    • Fourteen new unicorns joined the board in October, the second-highest month for the year.
    • Exits held up, but weren’t as strong as the month of September for both IPOs and M&A.

New unicorns

In October, more than a dozen new unicorns joined Crunchbase’s list of startups valued at $1 billion or more. The most highly valued of those was San Francisco-based Uber Freight, a startup that connects shippers with trucking companies; MessageBird an Amsterdam-based cloud communications platform; New York-based Unqork, a no-code platform; and Silicon Valley-based Tipalti, a company payables automation platform.

The majority of the new unicorns are U.S. based. Those headquartered outside of the U.S. include Netherlands-based MessageBird; ECARX, an intelligent network traffic assistant from China; Canada’s Wealthsimple, which provides tools to manage investments; and Razorpay, based in India, which helps businesses accept and disperse payments.

Together, these new unicorns have raised $2.4 billion and added $21.8 billion in value to the unicorn board. Thus far in 2020, 96 new companies have joined the unicorn board.

Global VC funding

Between January and October, global venture funding totaled $242 billion. That was up 4 percent over the first 10 months of 2019, when investors spent $233 billion.

Rounds of $100 million and more represented 54 percent of invested dollars in October 2020,—significantly higher than October 2019 at 38 percent—per Crunchbase data.

We have noted in past reporting that private-equity and late-stage investment firms were particularly active through the pandemic. Overall, $100 million-plus rounds have accounted for a higher percentage of total funding this year, at 55 percent, than last year, when such megarounds represented 48 percent of funding.

Decacorn valuations

Two companies were valued in rounds at decacorn valuations in October.

San Francisco-based delivery service Instacart raised $200 million at a $17.7 billion post-money valuation led by D1 Capital Partners and Valiant Peregrine Fund. The company has raised three rounds totaling $525 million this year to date. Its funding streak highlights a COVID-19-induced trend this year: Delivery companies around the globe have been raising capital at a higher pace due to increased demand from the pandemic. Another delivery company, Philadelphia-based goPuff raised $380 million this past month at a valuation of $3.9 billion in a round led by Accel and D1 Capital Partners.

Beijing based Yuanfudao, a live tutoring platform, raised another billion dollars at a $15.5 billion valuation, the highest valuation for an edtech company. The round was led by DST Global, which also invested earlier this year in India’s BYJU’S, a K-12 learning app. Yuanfudao has raised $3.2 billion in total this year so far.

IPOs

October is 2020’s second-highest month after September for venture-backed IPOs, based on both counts and amounts raised at IPO.

Shanghai-based fintech unicorn Lu.com went public in October, raising $2.4 billion—the largest amount for a venture-backed IPO last month. New Mexico-based solar tracking provider Array Technologies raised more than $1 billion in its public-market debut, and auto insurance company Root Insurance exited in an IPO that raised $724 million. Out of these listed companies, Array Technologies has gained the most, with its share price trading up almost 100 percent from its IPO price. (The IPO price refers to the valuation of the company after it prices shares but before its stock begins trading.)

M&A

Venture-backed acquisitions totaled $13.5 billion in October. Twilio announced the pending acquisition of customer data infrastructure company Segment in the largest M&A deal this past month at $3.2 billion. Another notable deal is Nestlé’s plans to acquire ready-made meal company Freshly out of New York.

Active investors

Multistage and PE investors picked up the pace in October 2020. Sequoia Capital, Accel and Lightspeed Venture Partners were the most active multistage investors with 14, 13 and 11 investments, respectively. Leading private equity and alternative investors included BlackRock, Tiger Global Management and Insight Partners.

Election slowdown likely won’t last

With the U.S. election looming, we saw a slowdown in funding announcements in the first week of November. But, with investors raising ever-larger funds and liquidity up, we expect capital will still be deployed at a strong clip through the end of the year. From a liquidity perspective, October is the second-highest month for venture-backed IPOs for amounts raised on going public. On the acquisition front, October is the third-highest month for priced acquisitions.

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 October global funding. 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 2020 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.

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

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