US Venture Exit Value Achieved $290 Billion in 2020 Alongside Record Years for Investment and Fundraising Activity

By Benzinga7 days ago

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SEATTLE, Jan. 14, 2021 /PRNewswire/ -- Though the past year had a lot of uncertainty brought on by the coronavirus (COVID-19) pandemic, the US VC industry demonstrated its resilience and long-term mindset, achieving new records in total exit value, deal value and capital raised by VC funds, according to the PitchBook-NVCA Venture Monitor, the authoritative quarterly report on venture capital activity in the entrepreneurial ecosystem jointly produced by PitchBook and the National Venture Capital Association (NVCA), with support from Silicon Valley Bank and Velocity Global. The US VC liquidity market exceeded expectations in 2020, with a group of massive IPOs driving exit value over 2019's strong showing. 2020 seemed to mark an inflection point in determining other feasible options for startups looking to go public, most notably the soaring number of public listings of special purpose acquisition company (SPAC) vehicles last year. On the dealmaking side, the earliest stages of venture were hit hard at the outset of the pandemic as sourcing, diligencing, and investing in these companies went fully online after years of leaning on in-person connections to close deals. While late-stage companies have been the strongest piece of the venture ecosystem in 2020, early stage activity rebounded over the second half of the year. Many in the industry assumed nontraditional investors would pull back from VC during the pandemic-induced crisis, but participation has only strengthened. The robust exit market from the past two years will continue to drive distributions back to LPs, reaffirming allocations to the strategy. VC fundraising activity remained a hallmark of strength in 2020 bolstered by public market liquidity from a strong IPO market, near-zero benchmark interest rates, and the large number of LPs underallocated to venture coming into the year.

To download the full report and data packs, please click here. PitchBook and NVCA will also be hosting a webinar in partnership with Silicon Valley Bank and Velocity Global on February 3, 2021 from 10:00 – 11:00 am PST. Please click here to register.

“The unprecedented macro events of 2020 did not deter the overall VC industry, which reached another banner year across the venture cycle,“ said Bobby Franklin, President and CEO of NVCA. “The startup ecosystem played a critical role in the technology, services, and healthcare support the country has relied on over the past ten months, and the industry's resilience and long-term investment eye will be pivotal to the country's economic recovery in 2021 and beyond. While some segments of the ecosystem felt the brunt of the headwinds from the pandemic and economic uncertainty more than others, VC investors are starting the year in a strong position with ample dry powder to put to work.“

“2020 showed just how resilient the US venture ecosystem could be amidst the unexpected coronavirus pandemic that sent shockwaves throughout the economy and world,“ said John Gabbert, founder and CEO of PitchBook. “Despite the uncertainty, we saw the highest ever recorded investment, exit and fundraising values in 2020 and as COVID-19 vaccines roll out and investors start to return to pre-pandemic behaviors, we expect this momentum to continue throughout 2021.“

Exit ActivityAggregate exit value in Q4 2020 reached $138.2 billion, bringing the annual total to $290.1 billion and surpassing the historic total of 2019. Exit value was propelled largely by the opening IPO window in the ...

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