Venture capital was flowing in the first quarter of 2021, with investors throwing investment money at tech companies at record levels.
According to Ernst & Young which used data from Crunchbase, venture funding hit $64 billion, an all-time high for a quarter, which is also almost half of what was invested in all of 2020.
Jeff Grabow, an analyst at Ernst & Young told CNBC “We’re technically still in a pandemic and trying to come out of it. A year ago everybody thought we were sliding into the abyss. To have a record quarter like this is pretty amazing.”
If that level of funding were to continue throughout 2021, it would lead to over $200 billion being invested by venture capital firms, something that’s never happened before.
Things started picking up late in 2020, as companies like Snowflake, DoorDash and Airbnb all had successful IPO’s.
In the first quarter of this year, there have been 184 venture deals that were of at least $100 million in value. Leading the way was $2 billion pumped into the autonomous car company Cruise.
SpaceX raised $80 million February, which valued the company at $74 billion, and Stripe’s valuation was set at $95 billion after a $600 million investment.
Grabow explained on CNBC why things are picking up. “There’s a lot of buoyancy and enthusiasm in the market because people are believing we’ve gotten through Covid. The digitalization and technology enablement of industries has been put on steroids.”
And 2021 is showing the popularity of SPAC’s as investing vehicles. So far this year $98.9 billion has been raised by just over 300 SPAC’s.
The bottom line is now is the time for companies with high growth potential to go looking for investors. They’ll probably find a few competing to throw money their way.