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Valuations for venture-backed companies at record highs

Valuations for U.S. venture-backed companies are at record highs, per data released this morning by PitchBook.

Between the lines: It's the new normal, in which nontraditional investors are traditional, unicorns are pigeons and startups are in the driver's seat.


Inside the numbers: Valuation creep can be seen across all stages of the VC ecosystem, from seed to pre-IPO. It's also showing up in both the medians and averages, and also across quartiles, reflecting how this isn't just a few big deals skewing the data.

  • Early-stage valuations hit all-time records in Q2 2021 of $50 million (median) and $105.4 million (average).
  • Late-stage valuations also hit new highs, with the trendline suggesting that average late-stage valuations could top $1 billion by year-end.
  • Value hunting: Deals in the four major tech hubs of SF, NYC, LA and Boston remain more expensive than deals elsewhere in the U.S.

What's happening: Most of this is just animal spirits running rampant, with price discipline now viewed as passé. Plus a ton of crossover money seeking yield and public equity markets forcing a reverse denominator effects on LP bankrolls.

  • This often means that funds are owning smaller percentages of their portfolio companies, with average late-stage stakes falling below 20% for the first time ever.
  • It's possible that a Fed taper or federal tax increases could grow valuation growth, but neither

What to watch: Fed tapering? Congress raising taxes on the wealthy? Maybe, but we've just lived through 18 months of a global pandemic that freaked out investors for all of five minutes.

  • Until and unless the public markets repeatedly punch venture capitalists in the nose, forcing them to taste their own red ink, startup valuations will continue to rise. And there's no indication that's going to happen, after several years of feeling like it should happen.

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Podcast: The vaccine race turns toward nationalism

The coronavirus pandemic is worsening, both in the U.S. and abroad, with cases, hospitalizations and deaths all rising.

Axios Re:Cap digs into the state of global vaccine development — including why the U.S. and China seem to going at it alone — with medicinal chemist and biotech blogger Derek Lowe.

School board recalls in 2021 skyrocket amid organized campaigns for critical race theory bans

Efforts to recall school board members are surging around the U.S. — and especially in California — amid Republican efforts to quash teaching about institutional racism.

Why it matters: Coordinated efforts by conservative groups are shaping public education, fueled by controversies over race as as well as backlash to COVID-19 closures.

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