Global venture capital investments hit record high

Reuters reports that according to Refinitiv data, global venture capital investments are at record levels this year, boosted by a surge in equities, higher liquidity and an increased interest in sectors that have benefited from the coronavirus pandemic.

Global venture capital funds invested $268.7 billion so far in 2021, far outstripping their total investments of $251.2 billion a year earlier.

The bulk of those deals were in software, e-commerce, digital healthcare and fin-tech companies, whose products and services have seen strong demand during the pandemic, data showed.

Late-stage startups have attracted the lion’s share of the funds, with venture capital firms pumping in $195.3 billion, or about 73% of their total investments, while early-stage companies have received $73.4 billion.

Rock-bottom interest rates, a rush to diversify their portfolios and a string of successful exits have also prompted global investors to set aside more money for venture capital funds this year.

U.S. venture capital funds raised $70 billion in the first half of the year, a 65% increase from a year earlier, according to Refinitiv data. Asian and European funds raised $16.1 billion and $8.2 billion, respectively, much higher than in 2020.

“This record breaking year for venture capital funding globally is the result of the creative economy being a legitimate asset class and investors knowing they need to have an allocation,” said Jeff Ransdell, managing director of Miami, Florida-based Fuel Venture Capital said.

“Companies are simply staying private longer than ever before, so the wealth creation is largely in the private sector at the moment.”