Christine Tsai is CEO and founding partner of 500 worldwide.
This was a different one Blockbuster year for global venture finance, with 2021 breaks records across the board.
Transaction activity is at record highs. A total of US$ 643 billion was invested worldwide last year, according to Crunchbase News, compared to $335 billion in 2020 — that’s a 92% year-over-year growth.
Not only is the VC industry awash with capital, but it has seen an historic number of exits. A record number of companies went public in 2021, many with tremendous valuations: 238 companies valued at over $1 billion debuted on the public markets last year. In 2020, only 61 companies went public with this rating.
VCs are paying close attention to the opportunities emerging not just in Silicon Valley but around the world.
Bigger, better capitalized and more global, the venture industry is poised to capitalize on the transformative technologies that are emerging. In the fourth quarter of last year, cumulative dry powder was a record $222 billion PitchBook.
Notwithstanding the macroeconomic challenges ahead, I expect startup funding to continue at an accelerated pace this year.
The technology world is evolving to meet changing consumer needs amid a global pandemic. This has created tremendous opportunities for founders everywhere to build world-class companies.
I see this firsthand with several of our investments, such as Bukalapak, an Indonesian e-commerce company that went public in August and operates in a market that has benefited in part from consumers staying at home and businesses selling more online during the pandemic.
In terms of fund allocation over the coming year, there are three transformative global technology trends that many VCs, myself included, are watching closely: the rapid rise of web3, capital flows to less obvious founders, and the ongoing globalization of venture capital.
Web3 goes mainstream
In the past few months, investors and companies have been throwing lots of buzzwords around DeFi to web3 and the metaverse. The increased focus on these areas points to a sea change happening on the internet – a decentralization and entrenchment in public blockchains where users call the shots and intermediaries have less influence.
