Venture Capital

The venture capital industry broke records last month, including most unicorns ever

Read more at www.businessinsider.com

  • January was a record-breaking month in new unicorn valuations, according to Crunchbase. 
  • There were multiple new unicorns a day worldwide, with 23 in the US alone. 
  • Crunchbase Data Evangelist Gené Teare told Insider she expects 2021 investing to remain on a tear.
  • Visit the Business section of Insider for more stories.

If it seems like there’s a new unicorn every day in 2021, that’s because there is: the venture capital industry broke records last month with the highest monthly unicorn count ever, according to data released by Crunchbase.

A unicorn is a venture-backed startup with a valuation of $1 billion or more. A decade ago such a thing was a rarity but these days unicorns have become as plentiful as horses. In January, there were 38 deals that created new unicorns worldwide, according to Crunchbase. In the US alone, there were 23 new unicorn valuation deals. 

Crunchbase Data Evangelist Gené Teare told Insider this spike in unicorns is, in part, caused by “IPO markets opening up with multiple routes to going public via traditional IPO, direct listing, or SPACs.” Basically, there are more options than ever for investors in startups to get great returns on their money by going public, and so investors are eager to put more capital into private markets.

Zapier, an automation tool, landed the largest valuation among the US crop last month with an estimated valuation of $4 billion, after its founders reportedly sold some of their shares to investor Sequoia in a secondary market sale (meaning the company didn’t issue new shares and raise funds). Calendly, an Atlanta-based scheduling software company, took second place, raising $350 million at a $3 billion valuation. 

But last month was groundbreaking for the industry in a few other ways. Globally, venture-backed funding reached an all-time high with $39.9 billion in investments, with over two-thirds going to the late-stage rounds that create unicorns. The previous record was $38.5 billion in July 2020.

Teare said she’s curious to see how the rest of this year unfolds — with a record-breaking month like January, more people are going to want in on the action. 

“2021 should be an interesting year for technology debuts, with many private equity and alternative investors looking to own stock in these high growth private companies who could seek to go public over the next few years,” Teare said. 

For the most part, she’s optimistic, saying these trends of sky-high valuations and massive fundraising are set to continue. 

As she wrote in the data recap, “2021 is already shaping up to be a blockbuster year for the venture-backed world.” 

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