Venture Funding Surged To A Record Level At US$ 64 Billion In Q1


  • The venture-funded company raised US$ 64 billion in Q1 2021. 
  • It is 43 percent of the total US$ 1.48 billion raised in 2020.
  • Elon Musk’s SpaceX raised US$ 850 million in venture funding in February. 

Surged Companies raked in the moolah in the form of venture funding made available in the first quarter of 2021. These companies raised a record US$ 64 billion in the first three months of fiscal 2021. As per data from Ernst & Young (EY) with inputs from Crunchbase, the amount equals 43 percent of the total US$ 1.48 billion raised a year ago in 2020.

The world is technically still reeling from the pandemic, but it is incredible to have raised this much as venture funds, said EY venture capital head Shaun Grabow. “A year back everybody thought it was sliding into the underworld. To have a record one-fourth like this is pretty incredible,” he said in an interview. Grabow reiterated that looking at the current scenario, the venture funding market is poised to see it through in a similar fashion for four years on the trot. However, it has to be seen if the segment can still make it to US$ 100 billion this year. 

The Market Rebounded After The Pandemic

It is surprising to see the market rebound after the onset of the Covid-19 pandemic. The second half of the year (2020) saw some significant IPOs including firms like Doodash, Snowflake, and Airbnb. 

According to Grabow, the year saw 183 venture deals, amounting to at least US$ 100 million in the first quarter, which is more than 50 percent of the previous year.

The best deal was Cruise’s US$ 2 billion funding, the autonomous car company’s circular in January. It was done in a strategic agreement along with General Engines—Cruise’s —major shareholder. The next big capital raised was by digital convenience shop Gopuff, which scooped US$ 1.15 billion in March. It remained the second-largest deal of the quarter. 

Next in line was Databricks, the Impair data analytics software program vendor. It raised US$ 1 billion in the same time frame. Another gainer was Robinhood, the trading app. The company needed liquidity after wild investing in GameStop, sending it into a money crunch.

It was followed by Elon Musk’s SpaceX, which also turned out to be the quarter’s greatest sub-billion dollar deal. It managed to raise US$ 850 million in February, which was at a valuation of close to US$ 74 billion. 

Apart from this, another worthwhile funding round was Stripes. The payment software company raised US$ 600 million at a valuation of US$ 95 billion in the discussed quarter.

 The Early-Stage Market Also Seems Upbeat

Along with the mega-rounds witnessed in the first quarter, Grabow anticipates a better market condition for the early-stage companies as well. There were reports of fundraising in Collection A and Collection B deals in the starting quarter of the year. 

He said, “There’s a lot of buoyancy plus enthusiasm in the market since people are believing coming from gotten through Covid. The digitalization plus technology enablement associated with industries has been placed on steroids.” 

Bottom Line

There are also reports that revealed that over 300 Spaces raised US$ 98.9 billion already in 2021. According to space Insider, it is more than US$ 83.4 billion raised a year earlier in 2020 in total. It was incidentally a record funding-raising season.  So, one can say that between Spaces and traditional financings moving into venture funding, traders are willing to take more risks as per EY’s Grabow.

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