If you're a venture capitalist (VC), 2021 was a busy year for you, but it also stuffed your bank account with enough money to satisfy Elon Musk for a whole afternoon. A recent infographic from Pitchbook.com based on its Index of Venture-Backed IPOs report shows that venture activity in 2021 set two key new records—deal valuation, which came in at $513.1 billion, and the number of IPOs, which hit 221. And those numbers go only through the end of Q3. The report analyzed all the top mega-IPOs of the year; the list leaned heavily in favor of fintech and had some surprises regarding post-IPO valuation.
The big winner was the Coinbase IPO, which generated a teeth-tingling $85.5 billion. The IPO also had some big names behind it: Andreessen Horowitz was in for over $9 billion, Union Square Ventures ponied up $4.6 billion, and Ribbit Capital tossed in another $3.9 billion. But the lion's share of the money came from small and miscellaneous investors, who are probably all shopping their little hearts out on Amazon right now.
Mobility technology maker Didi Global was significantly behind Coinbase but still managed to raise a yacht-buying IPO of just over $63 billion. The investor list had a smaller miscellaneous investor component than Coinbase, but it still accounted for most of the IPO's valuation at $37.18 billion. The other big-money names here included Softbank ($13.6 billion), Uber ($8.1 billion), and Tencent ($4.3 billion).
Pitchbook also noted that some of the largest IPO valuations nosedived shortly after their IPOs. For example, Softbank, the largest investor in Didi's IPO, is now holding a bucket of shares worth roughly half of what it paid for them. Other companies whose stocks dropped shortly after their IPOs include Coupang, Robinhood, and UiPath; each of those had initial IPOs worth more than $25 billion.
While not all IPOs resulted in short-term losses, the overall performance trend does mean many VCs will do a little head-scratching before flinging more cash around in 2022. Pitchbook cites a recent study by Lincoln International that reported 62% of the 400 private equity investors surveyed predicting 2022 would see only a slight rise in deal activity or even stay flat. That might sound bad, but remember that Pitchbook and Lincoln both had 2021's US deal value hit more than $780 billion and that only by the end of Q3. If that's "all" 2022 has in store for investors, we'll still see plenty of rosy-cheeked rich folks shopping for essential household goods, like platinum-weave underpants.
