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PitchBook's Emerging Technology Indicator Reveals Next Generation of Promising Startups

June 7, 2021

New Quarterly Report Provides an Overview of the Startups and Technologies Receiving an Outsized Proportion of Early-Stage Investment from a Select Group of the World's Most Successful Venture Firms

SEATTLE, June 7, 2021 – PitchBook, the premier data provider for the private and public equity markets, today announced the release of a new quarterly report, PitchBook’s Emerging Technology Indicator (ETI), which provides in-depth analysis on the disruptive technologies and startups receiving seed- and early-stage investment from top performing VC firms. By focusing on a smaller subset of investment activity, the report provides a unique perspective on technology trends and the next generation of promising companies. In this first iteration of the report, PitchBook’s Institutional Research Group tracked 171 startups who received seed- and early-stage capital from 15 top performing VC firms. Selection of these funds is based on PitchBook’s methodology, which ranks past firm performance on the ability of portfolio companies to raise additional funding, the proportion of their investments that exit, and the degree to which portfolio companies increase their valuation after investment. According to the analysis, the top five areas of technology investment in Q1 2021 included biotech, fintech, decentralized finance (DeFi), health and wellness tech and e-commerce.

To download PitchBook’s Emerging Technology Indicator, click here.  

“Every quarter, thousands of early-stage deals generate tens of billions of dollars of investment. Analyzing trends in investment activity among the most experienced investors can help us identify tomorrow’s most disruptive technologies and promising companies,” said Paul Condra, head of emerging technology research at PitchBook. “This quarterly analysis will prove essential in helping early-stage investors spot investment opportunities earlier and better navigate the competitive technology market.”

In Q1 2021, the ETI tracked 171 startups who received seed- and early-stage capital from 15 top performing VC firms, totaling $5.5 billion in the first quarter, up from $4.8 billion in Q4 2020, an all-time record. See below some key takeaways from the investment activity:
  • The top five areas of technology investment in Q1 included biotech ($1.49 billion invested), fintech ($808.4 million), DeFi ($542.8 million), health & wellness tech ($353.4 million), and e-commerce ($252.5 million).
  • Across all technology segments, PitchBook recorded $420.6 million invested in startups that are using AI & ML technology to power core products.
  • Within Biotech (largest area of ETI deal activity), companies receiving outsized deals include EQRx and Contessa Pharmaceuticals, which both focus on reducing R&D costs and accelerating timelines for taking products to market with technology. Other promising startups within this space include: Scribe Therapeutics (CRISPR) and Graphite Bio (gene editing), Layden Labs.
  • In fintech, the trend of developing demographic-focused financial services was a popular formula for attracting ETI deal capital in Q1, including: Greenwood, Zolve and Carefull.
  • DeFi – an area which has not seen significant investment for several quarters – represented the third-largest area of ETI deal activity in Q1, with $542.8 million invested across eight deals, a dramatic increase. Drivers of investment include, the price strength of core crypto assets, the emerging market for products such as NFTs, continued institutional involvement in the space, general regulatory acquiescence to the industry and the IPO of Coinbase.

To download PitchBook’s Emerging Technology Indicator, click here

About PitchBook

PitchBook is a financial data and software company that provides transparency into the capital markets to help professionals discover and execute opportunities with confidence and efficiency. PitchBook collects and analyzes detailed data on the entire venture capital, private equity and M&A landscape—including public and private companies, investors, funds, investments, exits and people. The company's data and analysis are available through the PitchBook Platform, industry news and in-depth reports. Founded in 2007, PitchBook has offices in Seattle, San Francisco, New York, London and Hong Kong and serves more than 50,000 professionals around the world. In 2016, Morningstar acquired PitchBook, which now operates as an independent subsidiary.
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