With $1.27B raised, DC stays on record-setting pace for venture capital funding in 2021

Venture capital totals for D.C. area companies got off to a strong start in 2021, and they’re continuing to rise with a new record high through the halfway point of the year.

In the second quarter of 2021, companies in the metro area collectively raised $1.27 billion across 72 deals, according to data from the PitchBook-NVCA Venture Monitor, a quarterly report produced by PitchBook and the National Venture Capital Association with support from Silicon Valley Bank.

When it comes to the dollars invested, that’s an all-time high for a quarterly total.

And it’s a big jump up from the $807.8 million invested across 60 deals in the second quarter of 2020. The dollars also double the total for the year, when paired with the $1.1 billion that was invested in the first quarter of 2021. With six “megarounds” of over $100 million, that figure was already the highest total going back to 2014, which is the earliest date the report covers.

D.C. proper similarly saw a rise, with a total of about $459 million invested across 25 deals, up from $256 million across the same number of deals in Q1, and $354 million across 18 deals in the second quarter of 2020.

It’s fitting for a quarter that saw lots of milestone deal activity, from a new unicorn being created with D.C.-based Morning Consult’s $1 billion valuation, to Gaithersburg, Maryland-based Xometry’s successful IPO. In all, the region saw four exits of companies based here, with the $293 million acquisition of Rockville, Maryland-based Vigene Biosciences by Charles River Laboratories as another standout. Software companies also made a splash when it comes to raises, with $32 million for Prefect, and $10 million for cloud-platform Verituity.

It comes against the backdrop of similarly skyrocketing VC funding around the country. The national numbers for the quarter set new records across angel, seed and early-stage VC dealmaking, according to the report. In all, $150 billion has been invested across 8,406 deals in the first half of the year for U.S. companies.

On the regional level, the Mid-Atlantic trends are mirroring that dynamic, said National Venture Capital Association Research Director Michael Chow. Just shy of $15 billion was invested into 752 companies in the area, topping Q1’s already-high total of 14.8 billion across 820 deals.

“Record levels of activity in seed markets during the first half of 2021 demonstrate that the vitality of the industry is not limited to large and late-stage investments,” David Hall, Managing Partner at D.C.-based Revolution’s Rise of the Rest Seed Fund, said in a statement. “The expansion of very early stage deals at the angel and seed stage outside of the traditional coastal tech hubs is another promising sign for the industry with increased venture activity reaching even more parts of the country.”

While it’s just one quarter, it contributes to an overall trend line that’s going up. Venture capital funding has been on the rise since the beginning of the pandemic, and that is only continuing in 2021.

“The post-COVID world is very different from the one we knew prior to March 2020, and I think a lot of innovators and entrepreneurs are focusing on the abundant opportunities to develop technologies and build companies that address the needs of a reopening economy that is structurally different due to the imprint COVID-19 has made,” Chow said. “Investors know this and are investing in startups that will meet the needs of our new normal.”

The Venture Monitor lists the top deals for the region as follows (of note, a $45 million raise at the number 10 slot is definitely nothing to sneeze at):

• Cava, the D.C. based Mediterranean culinary brand, raise $190 million
• Arcellx, a clinical-stage biopharma company, raised $115 million
• ValenzaBio, a Bethesda, Maryland-based biopharma company, raised $79 million
• Forever Oceans, a Gainesville, Virginia-based seafood company, $68 million
• Somatus, a McLean, Virginia-based Kidney Care company, raised $60 million
• Notal Vision, a Manassas, Virginia-based Notal Vision digital diagnostic services provider, raised $60 million
• Morning Consult, the D.C.-based data intelligence company, raised $60 million
• HawkEye 360, a Herdon, Virginia-based geospatial analytics company, raised $55 million
• Percipient.ai, a Reston, Virginia-based machine learning and computer vision firm, raised $50 million
• Truebill, the Silver Spring, Maryland-based personal finance startup, raised $45 million