The first half of 2021 has been a surprisingly good year for venture capital fundraising. US and international venture capital funds have raised over $88 billion since January 1, 2021. At this current level of venture capital fundraising, the 2021 fundraising total could surpass the record $130 billion raised in calendar year 2018. Our analysis reveals that the last twelve (12) months rolling average of venture capital fundraising is on pace to be near or at the all-time high for a twelve-month period.
This is due to many factors, such as investors seeking new investment opportunities in Agtech, biotechnology, energy, Fintech, logistics, medical devices and technologies, social media, transportation, etc.
Our research has found that there are over 420 active venture capital funds. The median fund size in the first half this year increased to over $70 million. This is at least 25% higher than 2020. Although it’s always changing, we believe that the average funding available for investing by large funds through July of this year to be around $200 to $220 million. This is an increase of over 35% from last year.
Many of the senior partners of venture capital funds with whom we work, have portrayed the first six months of 2021 as one of the busiest periods of their investing careers. We have seen investing and deal making, liquidity events, and fundraising at a rate that is higher than in 2019 – before the pandemic began.
New venture capital firms are having some trouble getting traction in the industry. However, established funds that have raised three (3) to five (5) funds are successfully raising additional funding. We estimate that the established venture capital funds have raised over %70 total new venture capital funding. Some venture capital leaders have told us this is the best year thus far they have ever seen.
It is good news for business owners of startup and early-stage companies seeking venture capital investment. There is a record level of venture capital funding now available (“dry-powder in venture capital jargon”) for attractive emerging early-stage businesses. The current amount of venture capital funding is at an all-time high of $278.3 billion.
Additionally, venture capital funds have experienced a very robust exit market the last 24 months with a record level of distributions of over $130 billion.
If the recent performance of venture capital exits continues and fundraising remains at the pace for the first six months of 2021, we should see a record amount of capital invested by venture capital firms in 2021.
If your business is ready to seek venture capital funding, now may be the time to reach out to the appropriate venture capital firms who are active within your industry niche.
