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United States Venture Capital Market- Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

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  • 160 Pages
  • January 2023
  • Region: United States
  • Mordor Intelligence
  • ID: 5724258
COVID-19 slashed the number of VC rounds in the U.S. by 44 percent. Over the course of pandemic, only 541 VC deals were made in the seed to Series B stages, compared with 964 deals in the same period in 2019-a 44 percent decrease in deals. The change varies across investment types, having the biggest impact on seed-stage deals, which dropped by 57 percent, down from 483 deals in 2019 within the three-month time period, to 209 deals in the March-June 2020 period. The number of VC-backed deals in the travel tech industry has decreased dramatically, down 400 percent, from 15 seed to Series B deals during March-June 2019 to three deals March-June 2020. The check size of travel tech companies has been massively hit. VC-backed Series A check sizes in the sector have dropped 84 percent, from $14.68 million in 2019 to $2.3 million in 2020.

VC fundraising showed continued strength in 2020, with the annual total surpassing 2018’s record. Fourteen US venture capital mega-funds of $1 billion or more claimed almost $27 billion as of Dec. The number of US VC mega-rounds of $100 million or more has jumped to 306 so far this year, comfortably surpassing 2019's total of 244. the total mega-round haul came to just over $68 billion, with Alphabet-owned Waymo taking the crown for the single largest deal at $3 billion. Additionally, the period saw the crowning of 87 unicorns in the US, also a decade high.

US Venture Capital Market Trends

Healthtech trends toward record-breaking year

At the intersection of health care and technology, health tech innovators have a unique place in the Future of Health. Investors, especially CVCs, can support the innovators and the industry in general. Innovators could bring transformative business models and a consumer-centric approach. it is imperative for investors, including industry incumbents, to coach innovators and support them with industry and regulatory expertise, in addition to capital, to accelerate toward the Future of Health together.

Growth in venture capital funding for health tech innovators, at record levels in 2020, will likely continue unabated in 2021. In 2020, venture funding for health tech innovators crossed a record breaking revenue. Even as the economy and industries, including the health care industry, reel under the impact of the COVID-19 pandemic, venture funding for these innovators nearly doubled in 2020, compared to 2019.

Growth in Female-Founded Startups Drive the Venture Capital Market

With recent progress, companies founded solely by women garnered only 2.3 percent of the total capital invested in venture-backed startups in the US. Recent studies found that for every dollar of funding, Female-founded startups generated 78 cents, whereas male-founded startups generated only 31 cents. It has been a big year for women in VC. Female-founded companies such as Glossier and Rent the Runway picked up mega-rounds in 1H and helped move the needle to roughly $1.9 billion in capital investment toward female-founded companies. he Bay Area has attracted more venture capital for female-founded companies since 2006, other metro areas have gained traction in recent years. VC-backed companies play an increasingly important role in the U.S. economy. Over the past 20 years, these companies have been a prime driver of both economic growth and private sector employment.

But American startups founded solely by female founders raised a large revenue in 2020, down only a billion dollars from in 2019 - the peak year for funding to sole female founders. 140 new women-led investment funds launched in the past four years, more than doubling the number that existed before 2017. Majority of the women partners in a survey said they had started their own firm. These emerging managers, as the VC industry calls new fund managers, are investing from small first funds and are heavily focused on seed- and early-stage deals.

US Venture Capital Market Competitive Analysis

United States Venture Capital market is highly competitive, with the presence of both international and domestic players. The market studied presents opportunities for growth during the forecast period, which is expected to further drive the market competition. With multiple players holding significant shares, the market studied is competitive.

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Table of Contents

1.1 Study Assumptions and Market Defination
1.2 Scope of the Study
4.1 Market Overview
4.2 Funding and Revenue Statistics in Venture Capital Space of United States
4.3 Market Drivers
4.4 Market Restraints
4.5 Porters Five Forces Analysis
4.6 PESTLE Analysis
4.7 Impact of COVID-19 on the Market
5.1 By Industry Type (2018-2022)
5.1.1 Banking & Financial Services
5.1.2 Healthcare
5.1.3 Telecommunications
5.1.4 Government Agencies
5.1.5 Other Industries
5.2 By Startup Stage (2018-2022)
5.2.1 Seed Stage
5.2.2 Startup Stage
5.2.3 First Stage
5.2.4 Expansion Stage
5.2.5 Bridge Stage
5.3 By Major States (2018-2022)
5.3.1 California
5.3.2 New York
5.3.3 Massachusettes
5.3.4 Washington
5.3.5 Others
6.1 Market Concentration Overview
6.2 Company Profiles
6.2.1 Intel Capital
6.2.2 Tiger Global Management
6.2.3 Bessemer Venture
6.2.4 Kleiner Perkins
6.2.5 New Enterprise Associates (NEA)
6.2.6 Accel Partners
6.2.7 Sequoia Capital
6.2.8 Khosla Ventures*

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Intel Capital
  • Tiger Global Management
  • Bessemer Venture
  • Kleiner Perkins
  • New Enterprise Associates (NEA)
  • Accel Partners
  • Sequoia Capital
  • Khosla Ventures*