Download our Fourth Quarter 2021 Financing Update Here
Strong economic fundamentals – strong balance sheets, low interest rates, and high financial returns – led to a record year for early-stage investing and initial public offerings. Venture capitalists (VC) raised $128.3 billion during the year, a 47.5% year-over-year increase, while investors were also recapitalized by an astounding $774.1 billion in liquidity from exiting investments. These factors, as well as the entry of nontraditional VC investors, contributed to the $329.6 billion that was invested in early-stage companies during the year.
Private equity and other growth equity investment counts echoed venture capital activity, with a 50% increase in deal count in 2021. Meanwhile, nearly 400 IPOs raised a record $142 billion during the year. A record 27 companies raised at least $1 billion in their offerings.
It remains a low interest rate environment for the time being, but the Fed has signaled it will raise rates this year to combat rising inflation. Bank of America analysts are calling for seven rate hikes this year, which would certainly slow economic progression. However, for the time being, it is a great time to raise capital, and there is significant appetite from investors to deploy capital.
As always, contact us if you would like to receive information about activity in your specific industry or geography, or if you would like to discuss options for your business.