RESEARCH TRIANGLE PARK – 2020 was a record year for venture capital investment, and data from the Q1 2021 PitchBook-NVCA Venture Monitor report, released today, shows that 2021 may again reset the record books.

“Capital is flowing well into venture,” said Clay Thorp, general partner at Hatteras Venture Partners, in an interview with WRAL TechWire, “especially into biotech/-ife science companies.”


On Tuesday, for example, Cary-based Epic Games disclosed raising another $1 billion.

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According to the report, nationwide, investors sent $69 billion into venture capital-backed companies in the first three months of the year.  That’s an increase of nearly 93 percent compared to the same quarter during 2020, which included the rapid onset of the coronavirus pandemic in the United States.

But companies based in North Carolina only pulled in $388.6 million, about half of one percent of all venture capital invested in the quarter. Epic’s funder will skew NC totals again this year as it has with its state-record fundings in two previous billion-dollar rounds.

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In the Tar Heel State, 35 companies completed 37 deals, with the three largest deals totaling $222.5 million, representing 57 percent of all capital invested into companies in the first quarter of 2021.  That includes the $81.5 million Series B pulled in by Durham’s StrideBio, a company backed by Hatteras Venture Partners, the $90 million closed by Durham-based Pairwise in February, and the $51 million added by  Chapel Hill-based Well Dot in a Series A.

“These are likely to be later stage deals as funds poured more money into existing portfolios than into new companies,” said Karen LeVert, venture partner at Pappas Capital and a board member of Ag TechInventures.  “This is great for later stage companies, not so much so for start-ups.”


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North Carolina’s healthcare sector pulled in $140.5 million, and technology companies received more than $45 million of the total invested in the state in the first quarter.  Consumer product companies, led by Well Dot, and Charlotte’s Rent Ready, which raised a $10 million Series A1 round, accounted for $71 million.

Money could find AgTech companies in 2021, said LeVert, as the global coronavirus pandemic exposed vulnerabilities in the supply chain, and solutions for those gaps are now being funded.

Nationally, late-stage investments comprised the highest proportion of deals at any point since 2010 as three-quarters of all investment dollars, nearly $52 billion, was allocated to companies at this stage across an estimated 1,291 deals.  But in North Carolina, late stage investment was just under $57.7 million in nine companies, compared to $304.8 million invested into 14 early stage startups.

Only four seed companies based in North Carolina raised funding from venture capital firms last quarter, totaling just a touch more than $10 million, while angel funding deals added $15.7 million into nine companies across the state.

“We have not seen an exponential growth in seed financings, especially in our area, but more in the A-C rounds,” said Thorp.

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Nationally, one trend that continues to accelerate: the closing of mega-deals, which increased yet again in the first quarter of 2021.  For the quarter, there were 167 deals at or more than $100 million invested, representing nearly $42 billion in capital invested in mega deals by venture capital funds.

One result of this trend is that valuations have exploded at the top of the market as capital availability swells, found the report.   “For now, exit market activity has expanded to validate the valuations of businesses in this stage, demonstrated by valuation step-ups at exit,” read the report.

Part of this explosion could be attributed to the increasing use of the special purpose acquisition company (SPAC) as a vehicle to access and deploy capital, though the research suggests that this increase is likely to have mixed results in the late-stage market, noting there is the potential to drive up late-stage pricing due to competition from direct venture capital investment.

The first quarter of 2021 was also notable as there were 447 estimated exit events for venture capital investors, that saw $118.1 billion become liquid, including the headline-grabbing exit of Roblox’s direct listing that valued the business at nearly $42 billion.

The widely anticipated initial public offering of Coinbase, and potentially UiPath or Databricks later this year, also have the potential for multi-billion dollar direct listings that will close in 2021, positioning the year as one that might be particularly successful for venture capital exits.

Of the exits, just two came from North Carolina, as RTP-based Vindara was acquired in a deal valued at $23.7 million and Durham-based Fabl was acquired for $10 million.

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