Private Market Update: March 2021
Despite the public markets’ slight turn last month, there’s no slow down in sight for the IPO market, which remains strong with a growing, robust lineup of companies primed to exit. Here’s a look back at record-breaking activity in February and what to be aware of as we look ahead.
All eyes on SPACs
According to the Refinitiv Deals Intelligence report, 50 acquisitions by special purpose acquisition companies were announced globally during February 2021 – the highest monthly tally of all time. The combined value of these deals was a record-breaking $108.6 billion.
It’s unclear, however, if there are enough public-ready private companies to satisfy the deluge of SPAC capital seeking a home. The sheer volume of SPAC money that’s chasing private companies to acquire also means there’s a real risk that some SPAC mergers will end up going bust.
Time will tell how SPAC mergers perform over the year. But, as companies assess their potential pathways to the public market, it’s important to remember and consider all options (and the benefits and shortcomings of each).
Funding reaches new heights
Primary venture capitalist (VC) funding reached new heights, with February recording an impressive ~$19B in funding across 274 companies, surpassing January as the most active month for VCs in prior years. *
With unicorns like Coinbase, Stripe and Robinhood continuing to make waves (and headlines), FinTech was the most active vertical, overtaking automotive from January and accounting for nearly a third of the month’s funding at ~$4.4B (up over $3B from the month prior).
Renewed interest in legacy names
Investors also sought out legacy unicorns, UiPath and Databricks, as both companies raised massive funding rounds, which landed these two names as the top companies of interest on the Forge platform in February.
Databricks closed a $1B funding round at a reported ~$28B valuation led by Franklin Templeton Investments, and UiPath raised a $750M round led by Coatue Management and Alkeon Capital Management for an estimated ~$35B valuation – both 3x greater than their previous valuations, and both potentially pursuing a direct listing approach.
This makes Databricks and UiPath two of the five highest-valued U.S. unicorns in 2021, alongside SpaceX, Stripe, and Roblox.
* PitchBook Data, public market data as of 2/26/2021