The Dramatic Growth of Global Venture Funding in 2021
By William ‘Bill’ Edwards, CFE, CEO of Edwards Global Services (EGS)
During my presentation to the International Business Circle on Global Business Trends on Thursday, February 10, 2022, the graph below was shown. There was a question as to why the 111% jump on the funding of global ventures in 2021 above the annual ~US$300 billion that was the case for 2018 through 2020. In the CB Insights ‘State of Venture 2021 Report” there is further breakdown of the components of this rapid jump to US$621 billion in 2021. Two charts from the report are shown below the original chart.
Then on February 11th and 12th in the weekend Wall Street Journal and Financial Times edition there were mentions of the rapid venture funding growth in 2021. See below. It appears the main reason for this 111% one year jump from ‘normal’ global venture funding was due at least partly to the following:
(1) Rapid growth across the world in the number of unicorns;
(2) A ramp up in IPOs, M&As, exits though various sources and in mega rounds of capital raising;
(3) Asia deal growth in 2021 – SE Asia now has more unicorns than China for the first time;
(4) Investment in innovation such as in the shipping and logistics sector as mentioned in the Wall Street Journal. Most of the companies that my company is helping to enter new countries went through huge innovation during the business shutdowns of 2020 and 2021.
(5) Interest rates for borrow capital were at the lowest level in many years; and
(6) Venture firms had lots of capital from their investors sitting on the side lines that they needed to place for returns.
“State Of Venture 2021 Report - It was a record year for global & US venture funding, exits, unicorns, and more. Global venture deals and dollars reached record highs in 2021. Funding more than doubled year-over-year as startup investment soared across sectors and geographies.”, CB Insights, January 12, 2022
The Technology That’s Helping Companies Thrive Amid the Supply-Chain Chaos
Startups are developing better ways to move products around, from snapping up goods stranded by logistics snafus to automating warehouse work. Bad news abounds about supply chains these days, with shortages of everything from cars to coffee cups. The better news: many companies are innovating fixes that could help prevent these kinds of snafus from becoming the new normal.
This level of interest in fixing our nation’s supply chains is unusual. Despite their utmost importance for businesses that make actual stuff, supply chains until recently weren’t exactly a magnet for venture capital. But lately, and especially since the Great Toilet Paper Crisis of 2020, supply-chain technology is suddenly hot”, Wall Street Journal, February 12, 2022
“Letter to the Editor: ‘US venture capital is late to the party of Europe’s tech revival’. Reading Sebastian Mallaby’s US-centric account of European venture capital (The Weekend Essay, Life & Arts, February 5) I am reminded that many in Silicon Valley still see Europe as a collection of museums and a place to go on vacation. And that’s OK with us.
Far from being a contrarian bet in 2019, Europe already had 93 unicorns (private tech companies worth at least $1bn), with enterprise value of $200bn….Venture capital investment in Europe, worth $42bn in 2019, had grown to $113bn by 2021, despite the economic hit of the global pandemic.”, Ophelia Brown. Founder, Blossom Capital, London N1, UK, The Financial Times, February 11, 2022 (underlining by William Edwards)
Bottom Line: What will be the case for venture funding for 2022 when interest rates are projected to increase? What role is cryptocurrency playing in this venture funding growth?
William (Bill) Edwards, CFE, CEO of Edwards Global Services (EGS) and a global advisor to senior executives, has a four-decade career successfully accelerating the international growth of more than 40 companies. During an extraordinary four-decades in international business, Bill Edwards has played a leadership role in the global growth of more than 40 brands. He is widely recognized as an International Problem Solver, Strategist, Advisor and a specialist on global cultures. Over the years, Bill has made and/or seen most of the mistakes franchisors make going global. His purpose is imparting the wisdom he has learned over time to help franchisor executives minimize costly mistakes.
For answers to the key Going Global questions that keep senior business executives up at night, contact him at bedwards@ edwardsglobal.com or on +1-949-224-3896.
Read his latest biweekly global update business newsletter at: www.geowizard.biz