Venture-backed startups continue to be flooded with cash, kicking off 2021 with a record amount of funding.
There were 184 mega-rounds — deals topping $100 million each — in the opening three months of the year in the US, according to a report from research firm CB Insights and PwC.
To put that into context, private US startups raised $62 billion in Q1 2021, almost half of the record $133 billion achieved last year.
It’s a sign that investors are looking to get into some of the most exciting and high-growth startups out of the US amid a slowdown in economic growth from the Covid-19 pandemic and rock-bottom interest rates. Competition is higher than ever, as hedge funds and private equity firms join major VC funds with plenty of capital to deploy.
The glut in funding represents the best quarter on record for late stage VC investment, the PwC/CB Insights MoneyTree report found. The $62 billion raised between January and March was up 117% on the same period last year and up 62% on the final three months of 2020.
Companies including Robinhood, GoPuff, Databricks and SpaceX were among the biggest raisers so far in 2021.
Robinhood hit the headlines when it brought in new investment via a $2.4 billion convertible note at the height of the GameStop saga. There were also a number of high-profile public exits in Q1 including gaming giant Roblox and fintech Affirm’s IPO which saw shares pop 98% on its first day of trading.
Mega rounds topping $100 million accounted for almost two thirds of the funds raised in the record quarter. The average size of a Series D round is now $75 million while Series E and beyond average above $100 million, per the report.
An apparent loser in this flight to mega deals has been US seed funding, which the report indicated trended down through 2020 and heading into 2021. Separate data from Crunchbase on seed and angel funding was less pessimistic, indicating that activity was flat year on year.