Q1’21 saw a record nine $1 billion+ VC deals, which accounted for nearly $17 billion in global VC investment. The US accounted for the majority of these large funding rounds, including raises by Robinhood, Rivian Automotive, VillageMD, GoPuff, and Databricks. China-based Xingsheng Selected, Hong-Kong based Lalamove, and Sweden-based Klarna raised the others. The companies that raised these funding rounds represent an impressive diversity of sectors, including wealthtech, e-commerce, automotive, delivery, logistics, challenger banking, and healthcare.
Very large mega-deals helped propel VC investment in the US, including a $3.4 billion raise by wealthtech Robinhood, a $2.6 billion raise by electric vehicle company Rivian Automotive, a $1.1 billion raise by delivery app GoPuff7 raised $1.1 billion, and $1 billion raises by healthcare practice management platform VillageMD and data analytics software company Databricks. These deals highlight not only the strength of the US VC market, but also its variety – with each company reflecting a different hot sector of investment, including fintech, automotive, logistics, and healthcare.
Growing deal sizes and the larger number of $100 million+ megadeals likely also contributed to the record 64 unicorn births in the US, including companies like Hinge Health, Dremio, Enfusion, Axiom Space, BlockFi, Pilot.com, and Cameo.
VC investment in Mexico was very robust in Q1’21. While fintech continued to be the hottest area of investment, online supermarket Justo raised the country’s largest deal of the quarter: a $65 million Series A raise. While Mexico's economy is struggling with Pandemic effects, the lack of support related to COVID-19 has caused many businesses to fail, which could have a negative impact on future investment. Political uncertainty is also causing some concern for investors, particularly related to emerging sectors like clean energy. All eyes will likely be on Mexico’s congressional election in June, as the election’s outcomes could affect key priorities.
Interest in fintech continued to accelerate in Q1’21, along with valuations for fintechs. In addition to Klarna’s raise, three UK based fintechs raised large rounds, including LendInvest ($381 million), Checkout.com ($450 million), and Rapyd ($300 million). With its $15 billion valuation, Checkout.com became the most valuable fintech company in Europe in January before Klarna’s raise put it at a $31 billion valuation. Interest in B2B was also high as corporates looked to leverage fintechs not only to digitize products and enhance their customer experience, but also to improve their general operations.
Asia continued to be an attractive market for VC investment in Q1’21, although ongoing travel restrictions likely affected the amount of international investment going into the region. A number of VC funds have targeted Asia, particularly Southeast Asia given its high population and its relatively low level of market maturity.