VC trends from Web Summit 2021

What’s trending in VC? PitchBook’s Nizar Tarhuni has the answer – and it’s looking good for exits.

After a socially and economically turbulent year, PitchBook’s senior director of institutional research and editorial, Nizar Tarhuni, spoke about the main trends in venture capital, and shared what to watch out for in future.

Nizar broke these trends down into three categories: fundraising, deal flow, and VC exits and liquidity.

He began with a brief overview, saying: “What you see today is, if you look across the overall tentatives market, you’ve probably seen a little over US$2 trillion has been raised by all managers across real asset secondaries, private equity and venture since 2017.”

Europe, while small, competes

Nizar’s main takeaway from the fundraising space is that Europe has maintained its share of the global VC market. The continent is hovering around 11 percent of the total, with median European fund sizes overtaking those of the US.

“From a capacity perspective, you’re seeing European funds able to actually compete on a per-deal basis,” said Nizar.

Looking at so-called ‘dry powder’, cash reserves and liquid assets, there is roughly US$440 billion available on a global basis, with 11 percent of that in Europe.

Non-traditional investors lead market shakeup

“One of the things I think is really interesting to think about is there’s a widening pool of investors that are finding their way into private markets in general,” said Nizar.

In 2021, US$241 billion worth of deals in the US and Europe have included non-traditional investors. This accounts for roughly 50 percent of total deals in these regions.

What’s more, 13.5 percent of total dollars invested in the US and Europe were led by non-traditional, non-VC investors. This accounts for between US$43 billion and US$44 billion dollars of total investment.

Non-traditional investment may be responsible for a favourable market for founders. Nizar said, “over the past couple of years, the market has really gone way more founder friendly … and I think part of that’s also being led by some of the non-traditional investors and a widening pool of capital in our markets”.

VC exits are going up

More than US$1 trillion exited markets in 2020. “In general, our total exit figure for last year [2020], on a global basis, literally doubled,” said Nizar. He added that 2021 was also looking strong, saying, “all in all, we’ve seen a pretty incredible market for venture so far this year”.

In the US, US$423 billion – around 70 percent – of all exit value came through the IPO market, representing 12 percent of total VC-backed exits.

In Europe, €85 billion was exited through the IPO market – 60 percent of total exit value, but 15 percent of total exits.

For more insights into the world of venture capital, join us in Lisbon in 2022. Pre-register for tickets here.

​​Main image:​​Piaras Ó Mídheach/​​Web Summit(​​CC BY 2.0)