State of the Markets Report Q2 2021
Key takeaways
01
Venture fundraising becomes more concentrated
The top 10% of funds account for 68% of venture fundraising in Q1 2021.
02
The COVID-19 pandemic stifled revenue growth for companies
The median time to scale to $75M in revenue increased half a year in 2020 to 5 years.
03
SPACs are chasing Frontier Tech companies
The proportion of de-SPACs involving a Frontier Tech company increased from 4% in 2019 to 30% in 2021.
We built this city (on Cap-i-tal)
Company formation has started to accelerate outside the traditional innovation hubs, with capital slowly following. This is enabled in part by investors getting comfortable with video conference calls in lieu of in-person meetings and remote due diligence.
Mega funds get the juice
Since 2010, the largest 10% of funds have increased their share of fundraising by 25 percentage points, now accounting for 68% of venture fundraising. The bottom 50% of funds, by size, now account for a mere 3% of all fundraising—down from 9% in 2010.
Different paths to liquidity
Direct listings have accounted for some of the largest exits over the past three years including Spotify, Slack, Palantir, Roblox and Coinbase all boasting IPO valuations over $20B.
Don’t look SPACS in anger
An interesting nuance of going public via a SPAC is the ability for companies to include forecasts in their regulatory filings—generally prohibited for traditional IPOs. When analyzing revenue growth projections for companies that completed a SPAC merger, they ranged from ~30% to ~150%.
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