Three quarters of the way through 2021, Colorado's technology and startup scene is leaving past venture funding records in the dust.
Midway through the year, it became clear that the state was reaching new heights for funding activity and that momentum has continued in the third quarter.
According to a new PitchBook-NVCA Venture Monitor report, Colorado startups raised $582 million from 87 deals between July 1-Sept. 30. That brought the yearly total to $3.8 billion raised across 342 deals.
The previous yearly record in Colorado was $2.7 billion raised, set in both 2020 and 2019. Part of the recent success across the state can be attributed to a rise in big-ticket deals above $100 million in total capital. While the state is No. 8 in the nation in terms of total dollars raised, and Colorado's average deal size so far outpaces any other year's since at least 2006, its average deal size still trails around 20 other states, including powerhouses California and Massachusetts. Colorado's funding so far this year, while much higher than last, showed much slower growth compared to most of the nation.
So far this year, there have been 13 Colorado deals that have topped $100 million in capital, including two that have been north of $200 million.
Last year, there were only three deals in that $100 million range, and that’s including new-to-Denver Palantir’s $550 million raise and a $127 million cash infusion for dual-headquartered startup Pie Insurance.
“The pace of activity across all facets of the U.S. VC ecosystem in 2021 has been astounding, with many annual records already shattered before the fourth quarter even started. Existing companies and a healthy pipeline of new startups have found investors – especially nontraditional investors – are eager to deploy the record dry powder and write ever larger checks,” said John Gabbert, founder and CEO of PitchBook, in a statement.
It’s not just Colorado that’s seeing a swell in venture activity.
Across the country, there was $82.8 billion invested across an estimated 3,518 deals in the third quarter. That brought year-to-date totals to $238.7 billion across 12,837 deals, surpassing the previous annual record set in 2020 of $166.4 billion.
And on the investor side, national VC fundraising activity for 2021 has already shattered last year’s record and is on pace to cross the $100 billion mark by the end of the year.
“There is no denying that the startup ecosystem is powering America’s economic comeback,” said NVCA President and CEO Bobby Franklin in a statement. “Lawmakers in Washington who are looking for ways to enhance our economic future should check out these record shattering numbers. The VC industry is this country’s biggest job engine, and we have the numbers to back it up.”
As Colorado matures as a startup ecosystem, the state’s promising companies inch closer to exits. So far this year, Pitchbook has tracked 30 exits across three quarters in Colorado. Last year, the state had 27 exits.
Much like with venture funding, Colorado’s growing exit activity mirrors a trend across the country.
According to PitchBook, exits brought more than $582.5 billion in value across 1,150 deals in nine months, surpassing $500 billion for the first time and doubling 2020’s previous record. IPOs accounted for 88.2% of that total exit value.
