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PitchBook Analyst Note: 2021 US Venture Capital Outlook

Q4 2020

PitchBook Analyst Note: 2021 US Venture Capital Outlook

December 11, 2020

Our 2021 Venture Capital Outlook forecasts trends that will shape the US VC industry in the upcoming year and reviews our analysts' predictions from 2020.

2021 predictions:

  • Biotech & pharma VC deal activity will likely exceed $20 billion for the second consecutive year.
  • Established managers will increase proportion of overall VC fundraising to above 75% for the first time since 2012.
  • Number of SPAC IPOs will decline YoY in 2021, and fewer than 30% of 2020 SPACs will close an acquisition. 
  • More VC-backed exits over $1 billion will occur via direct listings rather than SPAC listings in 2021.
  • Proportion of late-stage VC deal value relative to IPO proceeds will continue to compress in 2021.
  • Bay Area will fall below 20% of US deal count for first time.
  • Nontraditionals will lead a record 1,600 early- and late-stage VC deals as venture becomes more ingrained in their investment strategy.
  • Venture debt issuance will continue a string of record years, surpassing 2,600 deals and $25 billion originated for the fourth consecutive year.