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The Q3 2021 Global Venture Capital Report: Record Funding Trend Held Strong

The record funding pace continues into the third quarter of 2021 with $160 billion invested globally, matching the huge funding increase in the second quarter and up 78 percent year over year.

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New funding records

Prior to 2021, global funding had not reached over $100 billion in a single quarter.

Funding in 2021 has far superseded that amount, with the first quarter tracking at $135 billion, the second quarter reaching $159 billion, and the most recent quarter peaking at $160 billion.

Global Venture Dollar Volume From Q1 2020 to Q3 2021

Super-sized

Larger fundings dominated, with $103 billion (64 percent) invested in 400 companies that raised rounds of $100 million or more this past quarter. A further $57 billion was invested in over 4,700 companies in rounds below $100 million.

Funding amounts at $100 million or more grew 97 percent year over year, while rounds below $100 million increased as well by 51 percent in the same time frame.

Global Venture Dollar Volume Funding Split Below $100M

In this past quarter, 142 companies joined the Crunchbase Unicorn Board, compared to 145 in the second quarter. These past three quarters are up significantly over all prior quarters for new unicorn companies valued in a private financing above $1 billion for the first time with the board now listing over 1,000 companies, collectively valued north of $3.4 trillion.

Global New Unicorn Counts 2020 through Q3 2021

With this wide disparity in funding, let’s look at funding by stage.

Early stage peaks at $49B

Early-stage funding grew the most, up 104 percent year over year and 11 percent quarter over quarter, with over 1,900 companies raising at this stage globally.

Despite funding lags for the most recent quarter relative to past quarters, early-stage counts are up year over year by 19 percent.

Global Early-Stage Venture Dollar Volume From Q3 2020 to Q3 2021

Late-stage fundings above $100B

Late-stage funding is over $100 billion in the second and third quarters of 2021. Late-stage and technology growth funding dipped quarter over quarter, but is up significantly year over year by 69 percent.

Over 800 unique companies raised across 849 investments, which was also up year over year compared to just under 600 companies that raised in the third quarter of 2020.

Global Late-Stage Venture Dollar Volume From Q3 2020 to Q3 2021

Seed stage above $6B

Seed-stage funding is up year over year by 47 percent and is down a little quarter over quarter.

Seed funding counts and amounts typically increase over time, as these deals are added to the Crunchbase dataset after the close of the quarter.

Global Seed-Stage Venture Dollar Volume From Q3 2020 to Q3 2021

Exits

In 2021 to date, we find  26 venture-backed companies that debuted over $10 billion. This contrasts with 2020 where half that count, 13 companies, were valued over $10 billion at IPO.

The largest debut this past quarter was Robinhood. The company raised $1.9 billion and was valued at $32 billion at IPO.

Some of the largest venture-backed public debuts in the last quarter did not follow traditional IPO routes. Lucid Motors, Ginkgo Bioworks and Cazoo went public via  SPACs and Wise, Amplitude and Warby Parker via direct listings.

Notable Global IPOs in Q3 2021

Blockbuster funding year

We are on track to hit a blockbuster funding year with $454 billion invested through the first three quarters of 2021. This contrasts with $332 billion invested globally in 2020 across all funding stages.

With many growth companies raising funding at an unprecedented pace, the IPO market is predicted to remain strong through the end of the year and into 2022.

Crunchbase Pro queries used for this analysis

Funding & Exits

Unicorn queries

Methodology

The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of Oct 5, 2021.

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.

The most recent quarter/year will increase over time relative to previous quarters. For funding counts, we notice a strong data lag, especially at the seed and early stages, by as much as 30 percent to 40 percent a year out.

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.

For M&A transaction analysis, we include venture-backed companies and exclude companies that previously went public.

Glossary of funding terms

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

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