The US venture industry set a new high-water mark in 2021 by generating a record number of companies valued at more than $1 billion, surpassing the combined total of each of the past five years. Investors deployed more than $71 billion across 340 unicorn deals last year, according to PitchBook data.


A flood of funding from nontraditional and crossover investors has played a crucial role in driving up valuations. The average pre-money valuation for late-stage VC deals with nontraditional investor participation had hit a high of $1.13 billion as of the end of the third quarter, according to PitchBook's recent US VC Valuations report.

While much of the capital has gone toward late-stage mega-deals with lofty new valuations, 2021 also set a record for early-stage unicorn deals in the US.

In the first nine months of 2021, there were 23 early-stage transactions conducted at unicorn valuations, beating 2020's total of 13 deals and 2019's total of 12 financings, according to PitchBook data.

Founders have been able to grow more while bootstrapped than in the past, due to the ubiquity of cloud computing, non-dilutive funding sources and other third-party resources, according to the PitchBook-NVCA Q3 2021 Venture Monitor. That's resulted in stronger metrics for early-stage startups, helping them achieve growth earlier and draw significantly higher valuations.

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