PitchBook News - Our definitive 2021 recap for VC

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The Research Pitch

January 15, 2022

Making sense of an inexplicably active year for US venture capital

$330 billion in deal value.

Three-quarters of a trillion dollars in exit value.

More than $100 billion in fundraising.

These aren't annual figures that many would've expected from the US VC industry—especially during a global pandemic—but this is where we find ourselves with the full-year data for 2021 now available.

All year, we talked about the enormous increase in activity across all areas of US venture.

In the end, deal value was double the record high from 2020. Exit value was nearly 3x the previous record.

And the fundraising total was 50% higher than 2020's, to go along with a record number of micro-funds—not to mention the timing in data collection means last year will also likely set a record for total funds closed.

SPACs and IPOs have led the VC exit boom.

All of these trends tie back to the strong performance of the venture industry over the past five years.

High returns have driven a massive interest in the strategy, from investors launching new firms to timeworn investors diversifying into VC.

This has led to a pile of investable capital the likes of which has never been seen. Not only is VC dry powder at an all-time high, but capital from non-VC sources like hedge funds and PE firms is likely at unmatched levels, as well.

With the pandemic still encasing the global economy, and rate hikes possibly agitating markets worldwide, a similar activity level in 2022 might be difficult—though even a 20% drop in most figures would still constitute the second-highest annual totals ever.

Our Q4 2021 PitchBook-NVCA Venture Monitor has a ton of datasets and charts that look at everything 2021 offered in terms of US VC.

As usual, the data is accompanied by our analysis on what this unusual year means for the VC market going forward: download the free report

Feel free to reach out with any questions or feedback, or if you would like to discuss the research.

Best,

Kyle Stanford, CAIA
Senior Analyst, Venture Capital

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Breaking down US PE's prodigious year: Healthcare, software, GP stakes and more

The US private equity ecosystem surpassed all expectations in 2021.

For the first time in history, firms closed on over $1 trillion in deals, while the combined EV of exited companies more than doubled the previous record.

The breadth and strategic innovation of dealmaking were also noteworthy. The PE industry is maturing, with firms targeting myriad strategies beyond the vanilla buyouts that the industry was built on.

Our 2021 Annual US PE Breakdown is now bigger than ever as it unpacks the fervent activity across sectors, deal sizes, and strategies—all of which are featured in our comprehensive analysis.

The report also touches on how some are approaching ESG through diligence, reporting, and value creation measures.

US PE is bigger than ever (so is our new Breakdown report).

A high-multiple environment in public and private markets drove exit activity and runaway performance figures. Mega-funds ($5 billion+) publicly listed portfolio companies at a rate never before seen.

Many firms chose to exit holdings early as the lofty valuations led to investments surpassing financial targets well before the base case scenario.

An upswing in partial sales, continuation funds, and dividend recaps also helped boost cash returned to fund limited partners.

The timing of distributions is felicitous as most fund distributions are recycled into future commitments and 2022 is poised to shatter fundraising records.

Amid a frenzy of alts manager M&A and firm strategy expansions, the competitive landscape is in flux. And with at least 30 open or upcoming mega-funds seeking a combined $370 billion+, more capital is pouring into PE than ever.

For a more detailed analysis of trends in dealmaking, exit activity, and fundraising, click to download our 2021 Annual US PE Breakdown.

Clocking in at 56 pages, the free report provides in-depth analysis on PE activity in healthcare, software, GP stakes, music royalties, sports, continuation funds, PE firm M&A and strategy expansion, and more.

As always, feel free to reach out with any questions.

Best regards,

Wylie Fernyhough
Senior Analyst, Private Equity

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Benchmarks

The newest editions of our PitchBook Benchmarks have just gone live, with full data as of Q2 2021 and preliminary Q3 data in our global edition.

The report offers dozens of pages of fund performance metrics like IRR quantiles, pooled horizon returns, cash multiples and PMEs.

All of the following breakouts are available, as we continually work to improve the timeliness and expansiveness of our benchmarks:

Global (includes prelim Q3 data!)
North America
Europe
Private equity
Venture capital
Secondaries
Funds-of-funds

get our free benchmarks

Thematic Research

SoftBank Maps Out Latin America

Despite becoming one of the most prominent venture investors across the globe, SoftBank has only one fund family dedicated to a specific region.

The SoftBank Latin America Funds, totaling $5 billion and $3 billion, have sole permission to invest in the region, operating almost as a franchise without competition from the Vision Funds.

But SoftBank isn't the only non-domestic investor in the region, as more than 1,100 unique firms were active in last year's Latin America investment boom.

We break down everything that's happening in and around this emerging VC hotbed:

download our free research

Mega-Funds in US PE: Fundraising and Performance

The growth in PE mega-funds has been driven by record-setting deal activity.

An unprecedented pace for dealmaking has allowed the largest PE firms to rapidly deploy capital and return to market sooner with new funds at huge step-ups.

PE mega-funds are poised for a big lift in the years ahead.

But how are LP sentiments changing?

And, perhaps most important, how do mega-funds perform compared to smaller funds?

We unpack what's likely to be a lasting trend in the coming years:

download the free research

Webinars & Events

How is the AI & ML industry shifting its priorities due to the need for more data-centric AI processes?

What is driving the remarkable growth in foodtech and the rise of alt-protein providers?

Our emerging tech analysts hosted a webinar this week to discuss AI & ML and foodtech trends from our 2022 outlook: watch the replay

Jan. 20: Our London-based private capital analysts will discuss their outlook for Europe in the coming year: register here

Feb. 2: What should we make of the explosion of US VC activity over the past year? Our quarterly Venture Monitor webinar will address the hard questions: register here

In the News

Our insights and data featured in the press:

"In about a decade or so you're going to see a lot fewer neobanks, but they're going to be very large, and they will be able to compete with incumbent banks." [Bloomberg]

More on PE's record year: "We're definitely seeing a lot of sellers' markets across different industries and a lot of competition to deploy capital." [Institutional Investor]

A look at the "historically blistering pace" of PE-backed IPOs in 2021, and what to expect from VC-backed IPOs in 2022. [Forbes]

VCs invested $30 billion in crypto projects last year. [Bloomberg]

If you're a journalist interested in interviewing our analysts or requesting data, contact our PR team.

ICYMI

Highlights from our other recent research:

Market updates

Quantitative Perspectives: US PE's Recovery and Beyond
US PE Middle Market Report
Global Real Assets Report
Private Fund Strategies Report
US VC Valuations Report

Thematic research

Emerging Technology Research

Coming next week (subject to change)

2021 Annual European PE Breakdown (sneak peek)
2021 Annual European Venture Report

Thanks for reading! Feel free to email us any time with feedback, questions, or tips!

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PitchBook News - Our definitive 2021 recap for VC

Older messages

US VC sets trifecta of major records

SoftBank maps out Latin America

US PE deals top $1T in 2021

A fresh look at fund performance

US VCs raise nearly $13B in a week

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