Startup valuations soared last year, especially for 10 Bay Area companies in particular.
No company saw its valuation boosted more in a 2021 funding round than those startups — at least among companies that were worth at least $100 million after getting new funding.
To make this elite list of the 10 "hottest companies," a startup needed to see its value jump by nearly 1,000% as part of a funding round last year, according to data collected by Pitchbook Data for the Business Journal. To make the top of the list — the hottest of the hot — a company would have needed to see its valuation rise by nearly 2,800%.
You can see the entire list of the Bay Area's hottest companies in the gallery above.
Last year in the region, 1,221 funding rounds went to startups that were worth at least $100 million after closing the investment. Those rounds resulted in a median valuation increase of 144% for the companies involved.
Both of those were records. The previous high for the number of funding rounds that went to local companies worth at least $100 million post-funding was 938, set in 2018. The prior record for median valuation increase in those rounds was 97.5%, set in 2019.
In an indication of just how intense the competition was to invest in the hottest companies as 2021 wore down, six of the 10 biggest valuation jumps happened in the last two months of the year, while none were recorded in the first five months.
As might be expected, technology startups flooded the hottest companies list, taking nine of the 10 spots, with the other place taken by a material science startup. Among the technology companies, startups involved in Web3 sectors including blockchain technology and virtual reality were predominant, capturing three spots.
San Francisco-based startups took six of the top 10 hottest company spots. That's also not much of a surprise, given the city's dominance both nationally and locally in attracting venture capital dollars. The other companies on the list hail from Palo Alto, Mountain View, Redwood City and Campbell.
Four of the top 10 hottest companies saw their valuations jump as part of a Series A round. For four others, it was their Series B round that boosted their worth. The other two got a boost from their Series C rounds.
That's in line with the typically pattern — companies tend to see big valuation jumps in their early rounds after they first demonstrate their technology and begin to get some traction for it in the market.
