CB Insights - dot-com bomb

Hi there, 
 

So after this quarter’s record-setting venture numbers, the hot takes about it being like 1999 are coming fast and furious.

For those unfamiliar, 1999 was when the infamous dot-com bust happened.  

These takes are good for clicks, but they're otherwise facile and wrong.

Let’s start with what is similar between 1999 and today:

• Lots of $ piling into startups
• Price discipline is gone
• Everyone (not just VCs) wants a piece of tech
• Tech is top of mind for media
• Some “silly” companies are getting funded at lofty valuations

Yes — there are excesses in today’s venture ecosystem.  

But there are lots of differences:

• A lot more enterprise tech/SaaS today vs. heavy consumer. It's not eyeball monetization and other nonsense. It's ARR, NRR, churn, etc.
• The funding today is going to building product and getting to product-market fit and not racks of servers, colocation facilities, etc.
• The money is increasingly going to perceived winners vs. speculative early-stage cos. Look at the decline in early-stage deal share in the past quarter. It's at a 5-year low.

• 5% of total rounds are mega-rounds ($100M+), but they account for 58% of funding. The dollars are big, yes, but they’re not going to speculative companies that just appended a ".com" to their name.  

Keeping up with the SPACs

The number of SPAC mergers in 2021 has already more than doubled 2020’s full-year totals. But recent attention from regulators may have put a damper on the craze. 

Dig into how SPACs work and what they mean for the future of the IPO in this report. 

Strategize with the best

Yesterday, we walked you through the monster quarter in venture.

Next week, on July 20th, our analysts will provide a bit more color commentary on what happened in venture in Q2’21. Tune in for the webinar on Tuesday and we’ll walk you through the trends shaping global investment and M&A/IPO activity.

Register here.

Spicy AI trends

Amid a shortage of AI talent, companies are snapping up top AI startups.

From retail to healthcare, see which sectors have drawn the most AI acquisitions over the past decade in this heatmap.  

Blockbuster

Blockchain companies raised over $7B in H1’21, breaking 2018’s full-year record of $4.5B raised. 

We analyze the market drivers behind the surge, which categories are receiving the most funding, and more here.

Wall Street Journal. The Pro VC newsletter reports on cybersecurity startup funding and references CB Insights data.

Morning Brew. Matty Merrit (@mattynotmaddie) discusses global venture funding using the CB Insights State Of Venture Q2’21 Report.

CNBC. Ari Levy (@levynews) covers Tiger Global’s spending spree and cites CB Insights research.
 

I love you.
 

P.S. Prices for both in-person and online ticket options for Future of Fintech (Oct 5-6, NYC) go up tomorrow. Get 'em for you and your team today.
 

P.P.S. Our friends at Delek are hiring a Venture Capital Associate. Apply here.

Ahead of the pack. Fitness company Peloton pays out more royalties to artists than many of the major music streaming platforms.

Slate

Action-packed. Graphic novels made up almost 20% of adult fiction sales in the first half of 2021, more than double last year’s share. 

Publisher’s Weekly

For the love of the game. Older gamers may not be able to keep up with fast-paced video games as they once did, but that's not stopping them from playing.

WIRED 

Fake it till you make it. Art collective MSCHF has dropped 5 miniature “toy versions of iconic failed startups” like the Juicero juicer and the Coolest Cooler.

The Verge 

Mario! An anonymous buyer purchased a 25-year-old Super Mario 64 game for $1.56M, a new record in video game sales. 

NYT