In June 2021, Ralf Wenzel founded grocery delivery startup JOKR to meet the needs of millions of people who discovered the convenience of online grocery shopping. A month later, the startup raised funds 170 million dollars to build “a new Amazon,” starting with grocery delivery in nine cities. By December, JOKR has raised more $260 million, with a valuation of $1.2 billion. Tech startups are supposed to grow rapidly, but here’s a new kind of velocity: JOKR has gone from a twinkle in its founder’s eyes to a famous unicorn in just six months.
So it’s going to happen to hot startups in 2021. What seemed like huge — even record-breaking — investments last year were dwarfed by 2021 deals. Capital Venture capital is at an all-time high, with $628 billion spent globally on startups by 2021, according to data from Pitchbook. This is almost double last year’s total, setting the previous record. This overflow has led to dizzying valuations, fierce competition in deals, and a frenzy among investors looking to get in on the world’s next great companies.
Are startups really worth more in 2021 or are we at the peak of unicorn bubble? Micah Rosenbloom, a partner at Founder Collective, said: “I think we’re in a startup boom. He says that people who used to work at rocket startups, like Airbnb or Uber, are now starting their own companies, bringing with them knowledge of the startup that the previous founders didn’t. Yes. There’s also a lot of excitement about the ideas that will define the next decade in technology—Not just grocery delivery but cryptocurrencies and NFTs, the future of banking and biotechnology. Many of these ideas are so new that Rosenbloom says it can be difficult to understand their true value. “Is it the casino or the future of technology? People are trying to figure that out.”
Of course, VCs are an optimistic breed, and they’ve cut a lot of checks this year with betting that at least a few of them will succeed. “Founders in 2021 have to ‘lower proof’ to raise huge amounts of capital at massive valuations,” said Eric Bahn, a general partner at Hustle Fund. The transaction size increased dramatically this year; The average A-line is now $23.6 million, compared with $8.8 million five years ago, according to Crunchbase data. And transactions are happening faster. Music startup NFT Royal has caused a stir $55 million Series A in November, just three months after raising an $18 million seed fund.
One of the driving factors is the emergence of new investors. Companies on Sand Hill Road now have to compete with hedge funds, private equity investors and other “non-traditional” players. Those investors once shunned highly speculative tech startups. Now, they can’t have enough of them: Tiger Global, a New York-based hedge fund, has become one of the top startup investors of 2021, surpassing VCs in both size and speed among its transactions.
Rosenbloom says the contest has “speeded up everyone’s process”. “If you meet a great founder and they’ve got two terms sheets and they need to decide by Friday, then you have to play that game or not.” In the past, VCs could take weeks, months, or even years to build relationships with founders before backing their startups. In 2021, that timeline is often shortened to a week or less — a tight time to try to get to know the founders, assess the startup’s potential, and complete the process. appraisal process.
