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Global venture funding hit a new record high in Q1 2021

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A full year of the Covid-19 pandemic has resulted in tectonic movements in the business world, with tech companies in particular recording extreme growth.

According to a new report from Crunchbase, there are now a greater number of unicorns (companies valued at $1bn or higher) than ever before.

The report states that global venture investments hit $125 billion in the first quarter of 2021, up 50 percent quarter-on-quarter and up 94 percent year-on-year. In the same timeframe, almost two new unicorns popped up every working day.

Furthermore, the S&P 500 is also at an all-time high. This is mostly due to private companies having more ways to go public, including through special purpose acquisition companies (SPAC), which became somewhat trendy last year.

In terms of seed funding, the situation is a bit more complex than the figures suggest. Crunchbase says there have been fewer deals - 2,981 in Q1 2021, down from 3,682 in Q4 2020 - but roughly the same amount invested, at roughly $4bn.

Still, the report adds that this could be due to data lag and the number of deals is “likely to go up” as more are added to the dataset over time.

Both early-stage funding and late-stage funding also grew, with the former hitting a record high of $35.5bn. 

“The unprecedented global pandemic created the tailwinds for technology’s adoption growth in the past year,” the report concluded.

“With over 770 companies on our private unicorn board — and a further 220 companies on the emerging unicorn board, along with the 2,300 companies that raised funding from Series A onwards in the first quarter — 2021 is shaping up to be a blockbuster year as long as the public markets hold up.”