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Despite the ongoing impacts of the pandemic, 2021 saw US VC activity begin with a bang and end on a high note.

The Q4 2021 PitchBook-NVCA Venture Monitor, sponsored by Insperity, explores the data in detail, painting a dramatic picture of the US venture industry and depicting how the year toppled previous records for dealmaking, public listings, fundraising and more. Here's a breakdown of several noteworthy trends in the industry during 2021.

1. Venture capital investment nearly doubles year-over-year


US VC-backed companies raised $329.9 billion in 2021, nearly double the previous record of $166.6 billion raised in 2020. The increase in deal count did not match the pace of the surge in additional capital, signaling the continuation of a trend of increased deal sizes.

2. First-time financings on the rise


A high volume of capital and interest in early-stage venture investing is meeting a high volume of entrepreneurship in the US. PitchBook analysts predict that with the surge in opportunities for investors, first-time financings are likely to see strong growth in the near term.

3. Mega-deals push late-stage to record highs


Late-stage deal count in the US represented a YoY growth of 47% in 2021, illuminating the broader expansion of the number of mature startups that can be categorized as part of the late stage. VC mega-deal activity, which has recorded an exceptionally robust 2021 at 659 deals, is a result of significant interest flowing in from crossover investors.

4. Nontraditional investor participation continues to surge


VC has been the highest performing private capital asset class in recent years. Attractive returns have led nontraditional investors—including mutual funds, PE investors and sovereign wealth funds—to accelerate their participation in VC transactions, including mega-deals.

5. Public listings grab the lion's share of exit value


The exceptional spike in US exit value makes 2021 look like an outlier year. However, the numbers indicate the growth and maturation of startups in the VC market over the last five years. This exit boom includes 296 VC-backed public listings representing YoY growth of 114.5%, marked by the blockbuster IPOs of Rivian, Aurora and Gitlab.

6. VC fundraising eclipsed $100 billion for the first time


US VC firms raised a record-shattering $128.3 billion in 2021, representing a 47.5% YoY increase over 2020's fundraising figure of $86.9 billion. In addition, first-time fundraising value is also picking up steam after a sharp drop in 2020.

Read more: Q4 2021 PitchBook-NVCA Venture Monitor

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