Exits

Total exit value was 2.7x greater than in 2020

We described 2020 as an epic year for IPOs, and it was — until 2021 came along.

Total exit activity, inclusive of IPOs, mergers and acquisitions, and buyouts, reached a new record by count and value in 2021.

$774.1B

Exits by venture-backed companies

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US crypto exchange Coinbase made a big splash during the first half of the year after its public debut valued the company at $86 billion, well above its last private valuation of $8 billion. The IPO marked the largest-ever direct listing. Gaming platform Roblox went public at a $30 billion valuation, and South Korean e-commerce company Coupang, valued at $114 billion on opening day, also captured headlines in early 2021.

296 venture-backed IPOs

88%

Total exit value

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“The IPO window isn't just open. The glass has been smashed and the framing has been removed.”

Dan Primack, Axios. June 2021

The busiest quarter for US IPOs since 2000.

Despite robotic process automation specialist UiPath’s $31 billion IPO coming in below its last private round and some public market jitters, the second quarter was the busiest quarter for US IPOs since 2000.

2021

50%

Exits were software companies

2021

75%

Venture-backed IPOs valued at $1B+

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“SPACs aren’t dead – but amid increased scrutiny from regulators, a drop in investor confidence in the class as a whole, and a shifting economy, many investors in the field should be ready for some pain.”

Lucinda Shen, Term Sheet

The IPO window remained open throughout 2021.

High profile public debuts in the second half of the year included trading platform Robinhood, valued at $32 billion, and restaurant point-of-sale software provider Toast, valued at $20 billion.

Q2 High profile public debuts

$32B

Robinhood

$20B

Toast

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But post-IPO performance for many companies in the 2021 cohort proved to be lackluster, if not disappointing, by year end. According to Renaissance Capital, IPOs for venture-backed companies generated a negative return from offer, worse than the average return for all IPOs in 2021 and well below the positive return for the S&P 500.

We can’t finish our discussion of exits without mentioning the SPAC frenzy that continued in early 2021 with record filings and mergers. By early March 2021, SPAC merger volume had already surpassed volume for all of 2020, and by year end, approximately 600 new SPACs had launched.

2021

600

New SPACs launched

Although Southeast Asia ride-hailing company Grab became the largest company ever to close a SPAC merger in December at a valuation of $40 billion, the SPAC market generally cooled as the year progressed, leaving many already listed SPACs still looking for merger targets.

With the public markets pulling back in late 2021 and early 2022, the IPO story for 2022 may be written differently. On the heels of HR software company Justworks postponing its IPO due to market conditions, time will tell whether the likes of social media company Reddit, digital banking provider Chime, and grocery delivery service Instacart – among many other high-growth, maturing technology companies – see their IPO ambitions come to fruition this year.

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With the public markets pulling back in late 2021 and early 2022, the IPO story for 2022 may be written differently.