Based on eye-catching market activity in 2020, we anticipated that complexity (and excitement) would continue to build within private and public markets in 2021, that private market growth wouldn’t slow down, and that new pathways to exit would inspire innovation – and that’s exactly what’s happening (so far).
Let’s take a closer look at which trends are shaping the 2021 market to date, and where we anticipate some shifts.
The private market goes up, up, up
The unicorn universe continues to grow. Within the 337 deals closed in March, 26 of the private companies gained unicorn status – more than doubling the 12 new unicorns from February – bringing the total to more than 50 unicorns year-to-date.
Meanwhile, primary VC funding continues to soar month-over-month. The Q1 total in funding registered just under $58B on the Forge platform, which nearly doubled 2020’s Q1 total of $27B.
In short, there’s no slow down in sight on the private market.
Complexity spurred by SPACs
As expected, SPACs – or blank check companies – have introduced a new kind of craze and complexity to the markets. There were 264 SPAC offerings on the Nasdaq and the NYSE raising $76.8 billion from January to mid-March, according to a POLITICO analysis, while traditional IPOs had only 74 deals and raised $30.1 billion within the same timeframe. 1
The U.S. Securities and Exchange Commission (SEC), however, has opened an inquiry into the SPAC boom, sourcing information on how to manage associated risks with this pathway to the public market.
This could potentially contribute further to the SPAC slow down we’re starting to see, with SPAC shares declining significantly from their highs earlier this year, according to Yahoo! Finance. 2 While SPACs aren’t going away, this could start to seed an uptick in other alternative paths to exit, such as the hybrid auction method or more direct listings.
Fintech at your fingertips
Advancements in fintech continue to increase access and provide greater options for stock trading and investing for a new generation of traders and savvy professionals.
This year showed just how powerful Robinhood’s user-friendly investment technology is at engaging the everyday trader, while the latest mania around non-fungible tokens (NFTs) is both an investment opportunity and an emerging art form. NFTs work like any other speculative asset, where you buy them, hope the value goes up, and then sell them for a profit. 3
We’re seeing an increased appetite for democratized finance today that will only lead to more innovation throughout the year and beyond, as entrepreneurs and tech gurus’ interest and innovation piques, and they continue to figure out how to better serve this shifting paradigm on both the private and public markets.