The state of private markets: Q2 2021

The state of private markets: Q2 2021

Author: Peter Walker
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Read time:  2 minutes
Published date:  4 August 2021
One big trend in private markets: a soaring average deal size. In the first half of 2021, companies have already raised 96% of all cash raised in 2020.

 In our quarterly State of Private Markets report, Carta pinpoints trends across the venture capital ecosystem. We use the aggregated and anonymized data of more than 21,000 companies on Carta’s platform. Together, they represent more than a trillion dollars in post-money valuation and more than 220,000 startup investors.

In Q2 of 2021, the venture capital industry in the US—and the high-growth companies it funds—took flight. The data shows two big trends: a gradual increase in the number of fundraising rounds per company and a soaring average deal size. Companies in 2021 have already raised 96% of all cash raised in 2020.

Key highlights

  • More money is going to the megadeals. Only 6% of rounds raised more than $100M in the first half of 2021, but those rounds accounted for 49% of total cash.

  • Late-stage deals are skyrocketing.The median valuation for a Series D company that raised a round in Q2 was up over 100% from 2020. Nearly half of all companies that raised a Series D in Q2 achieved unicorn valuations.

  • Employees are making stock decisions.Whether they took part in “The Great Resignation” and faced a “ post-termination exercise window” or were just expressing confidence in the growth prospects at their companies, employees exercised their vested options at record-high rates in Q2 of 2021. 

Employers, on the other hand, continue to hold to outdated ideas about the length of time an employee should have to exercise their vested shares after they depart. As the hiring market heats up, a longer window could be a potential talent advantage for progressive companies, and some (like Amplitude) have already made the change. At Carta, we believe that employers should extend the post-termination window. Read our employee shareholder bill of rights.

In the full report, we dive into these trends and examine others—including a spike in early-stage deals, an interesting change in the use of SAFEs, whether traditional fundraising stages are still useful as a benchmark of growth, and where venture capital ecosystems are growing quickly outside states outside the hubs in California and New York.

The State of Private Markets, Q2, 2021Download the report button

Peter Walker
Author: Peter Walker
Peter Walker runs the Insights team at Carta, focused on discovering key data and narratives across the private capital ecosystem. In a former life, he was a marketing executive for a media analytics startup and led the data visualization team at the Covid Tracking Project.
DISCLOSURE: This study uses an aggregated and anonymized sample of Carta’s data. Companies that have contractually requested that we not use their data in anonymized and aggregated studies are not included in this analysis. The data presented in this private markets report represents a snapshot as of June 30, 2021. Historical data may change in future studies because there is typically an administrative lag between the time a transaction took place and when it is recorded in Carta. In addition, new companies signing up for Carta’s services will increase historical data available for the report. Terminations entered into Carta must include a reason. Involuntary terminations include both terminations for performance and company layoffs. Voluntary terminations are employees who decided to leave of their own accord. Other termination reasons, including for cause, death, disability, and retirement, were not included in the data and make up less than 1% of all terminations combined. This publication contains general information only and eShares, Inc. dba Carta, Inc. (“Carta”) is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services nor should it be used as a basis for any decision or action that may affect your business or interests. Before making any decision or taking any action that may affect your business or interests, you should consult a qualified professional advisor. This communication is not intended as a recommendation, offer or solicitation for the purchase or sale of any security. Carta does not assume any liability for reliance on the information provided herein. ©2021 eShares Inc., d/b/a Carta Inc. (“Carta”). All rights reserved. Reproduction prohibited.