The wave of listings and sales in the United States plunged technology investors and employees into a record $ 582.5 billion in revenue over the year to September.
Start-ups that have completed initial public offerings, direct listings, or transactions with special purpose acquisition companies accounted for $ 513.6 billion, with 93 listings between July and September.
Total revenue from sales and listings has already doubled from last year, according to data from PitchBook, which surveys start-ups.
The increase in listings promises to bring huge profits to venture capital and its investors, expanding the hot streak of its public market debut back to last year’s IPOs on Airbnb, DoorDash and Snowflake.
According to PitchBook data, investors are pointing out the size of the recent so-called exit to justify the surge in transactions this year. This is already over 40% above last year’s record total.
Andrew Adams, Managing Partner of Venture Oak HC / FT, said the booming market has allowed some investors to rate private start-ups until listing is the only viable exit opportunity. Was urged to raise.
“It puts a lot of pressure on building a great company,” Adams said.
While sales to corporate and private equity sponsors make up the majority of startup exits, large listings represent an increasing chunk of revenue from venture capital investments. Venture capital firms rely on exits to return cash to investors such as endowments and pensions.
Fee-free brokerage firm Robin Hood created the biggest exit for investors in the third quarter after completing an IPO with a market capitalization of $ 32 billion. Robin Hood raised approximately $ 5.6 billion from retail investors prior to its listing. This includes $ 3.5 billion in convertible bond funding earlier this year.
Coinbase, a cryptocurrency exchange, completed its largest direct listing to date this year, reaching a market capitalization of $ 76 billion on the first day of trading in April. With less than $ 600 million raised before its public debut, Coinbase has become one of the most profitable early venture investments in history.
Venture capitalists and other insiders typically have to wait six months after listing to start offloading their shares, but there are no restrictions on selling directly. Robin Hood also relaxed some of the regular guardrails, allowing employees to sell 15% of their stake immediately.
A wide range of venture-backed companies are directed to the public market and have recently begun to accept fast-growing companies with low or no profits. According to Refinitiv data, tech companies have completed a more traditional IPO in the United States this year than in any year since 2000.
The large list also includes some immature start-ups with minimal sales published through Spacs, an alternative to traditional IPOs that have gained temporary support among retailers.
Cameron Stanfill, a PitchBook venture analyst, said:
Tech investors earn over $500bn from US public listings in 2021 Source link Tech investors earn over $500bn from US public listings in 2021
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