Gopuff and SpaceX mega-rounds led to a record quarter for venture deals

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Source: goPuff

Coming off a boom year for the tech industry, investors spent the early part of 2021 pouring money into food delivery companies, online brokerages and Elon Musk’s SpaceX, leading to a record quarter for U.S. venture funding.

Venture-backed companies raised $64 billion in the first three months of the year, according to analysis this week from Ernst & Young, using data from Crunchbase. That equals 43% of the $1.48 billion raised in all of 2020, which was a record year.

“We’re technically still in a pandemic and trying to come out of it,” said Jeff Grabow, U.S. venture capital leader at Ernst & Young, in an interview. “A year ago everybody thought we were sliding into the abyss. To have a record quarter like this is pretty amazing.”

Grabow said that while we’re clearly on pace to see a fourth straight year of $100 billion in venture funding, “the question is — will there be a $200 billion year?”

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The late-stage market continued its blistering pace following a historic second half for IPOs that included offerings from Snowflake, DoorDash and Airbnb. The first two quarters of 2020 were quiet as companies altered their plans because of Covid-19, but the market rebounded in dramatic fashion and has continued to hold up.

Grabow said there were 183 venture deals of at least $100 million in the first quarter, more than half the amount for all of last year. The biggest deal was autonomous car company Cruise’s $2 billion financing round in January, led by Microsoft as part of a strategic agreement with General Motors, Cruise’s majority owner.

Digital convenience store Gopuff raised $1.15 billion in March for the second-largest deal of the quarter. Cloud data analytics software vendor Databricks raised $1 billion in the period, as did investing app Robinhood, which needed liquidity after wild trading in GameStop left the company in a cash crunch.

The biggest sub-billion-dollar round was for private space company SpaceX, which raised $850 million in February at a valuation of about $74 billion. Also among the top deals was payment software company Stripe’s $600 million raise at a $95