Q3 2021 Report Finds Web3 & DeFi, Enterprise SaaS, Supply Chain Tech and Gaming Lead Funding Activity
SEATTLE, November 17, 2021 – PitchBook, the premier data provider for the private and public equity markets, today released its Q3 2021 Emerging Technology Indicator (ETI), which provides in-depth analysis on the disruptive technologies driving growth opportunities and predicts the next generation of promising companies. The report tracks a smaller subset of startups receiving seed- and early-stage investment from top performing VC firms. In this third iteration of the report, PitchBook’s Institutional Research Group tracked 189 early- and seed-stage deals that involved the top 15 VC firms. These firms are determined each quarter based on the success of their investments over time, in terms of exits and valuations. According to the analysis, top performing VCs
are chasing emerging technology deals, deploying $6 billion across 189 deals in Q3 2021, the highest amount on record.
To download PitchBook’s Q3 2021 Emerging Technology Indicator, click here.
“Investment activity across early-stage emerging technologies is another proof point of frenetic VC environment,” said Paul Condra, head of emerging technology research at PitchBook. “Emerging tech deal sizes tend to run 3x to 5x larger than median deal sizes across the entire VC industry, which is driven by several factors, including the tendency for our ETI investor cohort to be larger, multi-stage investors; their ability to obtain larger stakes in startups, and the higher likelihood of co-investment resulting in larger rounds. Investors are also closely monitoring current events driving market and economic trends, resulting in changes in the top five sectors attracting investment.”
In Q3 2021, there were 14 early and seed stage deals over $100 million, up from eight deals in Q2 2021 and significantly higher than the historical quarterly average of three dating back through 2015. Compared to ETI deal trends on a cumulative four-quarter basis, Q3 deal activity was notable for several reasons, including the surge in Web3 & DeFi funding as well as the strong quarter for supply chain tech and the relatively low investment quarter for health and wellness tech and biotechnology.
See below some key takeaways from the investment activity in Q3 2021:
- The top three deals included a $900 million Series B for crypto trading platform and NFT marketplace FTX, a $250 million round for blockchain-based gaming platform Dapper Labs, and a $170 million Series A for ultra-fast grocery delivery platform JOKR.
- The top five areas of technology investment in Q3 included Web3 & DeFi ($1.3 billion), fintech ($860 million), enterprise SaaS ($493 million), supply chain tech ($454 million), and gaming ($387 million).
- Web3 & DeFi was a standout segment of investment in Q3 with $1.3 billion invested across 12 deals, by far the largest amount we have tracked in a quarter. Key trends driving investment in the sector, include the growth of marketplaces for trading cryptocurrencies and NFTs, continued fund formation from high-profile investors, and steady development of new protocols and DeFi projects.
- Enterprise SaaS attracted more $493 million VC dollars in Q3. While providers in this segment run the gamut of enterprise use cases, Q3 was notable for startups focused on recruiting, onboarding, and other employee management functions.
- Supply chain tech was the fourth largest segment of ETI investment, generating $454 million in deal value. While investment value was driven by a few larger deals, increased investment activity in supply chain startups is expected to persist in the coming quarters, particularly in startups focused on tech-driven sourcing and delivery tools.
To download PitchBook’s Emerging Technology Indicator, click here.
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