According to CB Insights’ latest State of Venture Report, global startup financing in Q2’21 reached $156.2 billion, a 157% year-over-year increase and a record quarter high. U.S. startup funding accounted for the largest portion of the global quarter total, raising $70.4 billion, followed by Asia raising $42.2 billion. Meanwhile, funding to China-based companies continued to decline with an 18% drop from its peak in Q4’20.
As a result of increased funding, global unicorn births saw a record quarter high with 136 new unicorns, an increase of 491% year-over-year. In the first half of 2021, the average unicorn valuation rose to $1.6 billion, up from the 2016 average of $1.2 billion. Mega-round deals (capital raises over $100 million) almost tripled compared to Q2’20, totaling 390 deals. Global M&A exits rebounded from pandemic lows to reach new records with 2,613 M&A exits and 280 IPOs.
Source: CB Insights State of Venture Report Global: Q2 2021
Venture-backed fintech funding also reached a new high; it represented $33.7 billion or 22% of the global venture financing total. Other sectors that saw growth include e-commerce–funding was up 23% quarter-over-quarter, raising $16 billion. Following three quarters of funding growth, digital health saw another quarterly increase, raising $14 billion and AI funding reached a new half year record, raising more than $30 billion.
In line with global increases, to date, U.S. venture funding is close to 2020’s yearly total despite a dip in number of deals. Paralleling the global quarter record, the U.S. also reached a record quarter high of 76 unicorn births. Notable U.S. unicorns include Stripe valued at $95 billion, SpaceX valued at $74 billion, and Instacart valued at $39 billion. The U.S. also saw increases in valuations across all financing rounds. Especially noteworthy was the increase in series A valuations, rising to $42 million. In addition, U.S. exits are close to 2020’s full year level and IPOs reached a quarter high of 88.