VALUATIONS

2021 saw the highest valuations since last decade

As with all things venture, 2021 was also a record year for company values. Valuations across all stages continued to rise throughout the year.

Late stage pre-money valuations increased the most of any stage, reaching a record high of $114.5 million, while valuations for early stage startups also hit a record high of $46 million.

$114.5M

Valuations for late stage startups

$46M

Valuations for early stage startups

Tweet Stat

Seed and angel valuations rose as well

When compared to one- and five-year periods, seed and angel valuations rose more modestly than other stages.

Seed valuations could come under additional pressure in the coming years given how late stage investors are continuing to push into the capital stack earlier and traditional multi-stage firms are raising dedicated seed funds to help them compete in an increasingly crowded market. Sizable seed-focused funds were raised by Index, Khosla, Greylock, Sequoia and Andreessen Horowitz in 2021.

Index

$200M

Khosla

$400M

Greylock

$500M

Sequoia

$195M

Andreessen Horowitz

$400M

“Unicorns are so common that the term is by now clearly a misnomer.”

Gil Dibner, Angular Ventures

Outcomes and exits have grown commensurately larger

Valuation inflation has gone hand-in-hand in recent years with the abundance of capital chasing founders and a highly competitive environment.
But valuations, particularly at the late stage, also reflect the immense scale that a new generation of technology companies can reach in the private markets. Although investors are paying higher prices compared to several years ago, the outcomes and exits have grown commensurately larger as well.

As of January 2022

960

Unicorns

$1B+ valuation

51

Decacorns

$10B+ valuation

Tweet Stat
“With the influx of capital, the number of $1B+ outcomes in venture continues to increase, and we believe the size of those outcomes will continue to grow as well. [It once] was commonplace to talk about how we needed to get into the 15 deals a year that would eventually generate a $1B+ outcome. That was VC wisdom at the time, and in just ten short years, that number has grown exponentially. I don’t believe this trend stops anytime soon as we are in the early innings of AI, crypto, cloud and the digital transformation inside the enterprise. These are all massive software shifts that will take 10-15 years to mature. Combined, we could be looking at an opportunity set that is larger than one trillion dollars!”

A Capital

Building Image
With the public market decline in early 2022, however, private valuations – theoretically – could follow in lock-step, albeit with a lag in time. Time will tell how sustained or widespread any valuation correction might be.