2Q21 Digital Health – Halftime Show…



Good golly. The mid-year funding data were released this week and the numbers are nearly off the charts – literally. In 2Q21, $75.0 billion of venture capital was invested in 3,296 companies across all sectors, bringing the total through June to $150.0 billion, according to National Venture Capital Association and Pitchbook data. Were the year to end today, it would be the second most active year of all time, just behind 2020 (which is only about 10% greater than where we are now). This is the all-time greatest level of quarterly venture activity, only tied with last quarter. Globally, Crunchbase identified $288 billion of venture capital investments in 1H21, more than 2x last year’s pace.

The greatest contributor to this surge was the prevalence of Late Stage investment activity, which was nearly 69% of all capital invested in 2Q21 (and perhaps not unexpectedly only 31% of all companies given relative round sizes). Mega-rounds (greater than $100 million) accounted $42.2 billion (56%) of the activity across 198 companies in the quarter. CB Insights tallied 136 new unicorns created in 2Q21. A number of non-venture investors (hedge funds, mutual funds, private equity firms) have become considerably more active in this market, accounting for over $116 billion (77% of the total) in 1H21, more often than not investing in significantly de-risked Late Stage companies. The presumption of significant Late Stage “up rounds” may be contributing to the recent spike in Series A valuations.

Surging public equity valuations, robust M&A activity, and greater (Read more...)