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How Big is the Bubble?

How Big is the Bubble?
January 3, 2022

The Daily Stack is a daily private market insights newsletter by PrivCo, a private company intelligence platform. Read our previous insights.
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The start of a new year is typically a hopeful time, complete with resolutions for new habits and new agendas. This year’s bright future has been somewhat dimmed by Omicron’s rampant presence, infecting the hopeful New Year vibe with isolation and canceled plans. Gyms are typically receiving their biggest influx of new guests during this time, but this highly transmutable variant might ice those plans for many. Those planning to escape the winter blues might be hard-pressed to find a flight, with cancellations due to staffing shortages continuing.

Despite our reluctance to enter yet another year with COVID still raging, one area seemingly unaffected is the early-stage investment landscape. This past year, 2021 proved to be a booming year for valuations in novice startups, with greater competition among seed-stage deals, and there’s little sign of it slowing down. Enormous returns for private market investors in companies like Robinhood and Doordash -- as well as a rapidly evolving tech landscape sped up by the pandemic’s push for a more digital world (think food-delivery and mobile payments) -- are adding to the hype around early investments.

Some investors describe the dizzying heights of returns and valuations of early companies as surreal and possibly irrational. A Wall Street Journal article on the subject points out the example of Blank Street, a coffee company that has raised three rounds of funding since its founding in 2020 for its business proposition of no-frills coffee shops in Manhattan.

Some companies that saw exceptional growth on the public ticker during the pandemic have since had plummeting returns–a reminder that exponential growth has a great distance to fall. Peloton and Zoom have both taken nosedives since their early pandemic icon statuses.

To see what happens to these outsize investments in 2022, stick around the Daily Stack.

Since last week, PrivCo has added:
228 Companies | 96 Funding Activities | 21 M&A Deals

Largest Private Company Investments of 2021:


Robinhood raises $3.4BN from Ribbit Capital

Trading • Equity • Menlo Park, CA
 

Cruise raises $2.8BN from Microsoft

Autonomous Vehicles • Equity • San Francisco, CA
 

Rivan Automotive raises $2.7BN from T. Rowe Price

EVs • Round E • Irvine, CA
 

Waymo raises $2.5BN from Alphabet

Autonomous Vehicles • Equity • Mountain View, CA
 

Lineage Logistics raises $1.9BN from Oxford Properties

Logistics • Equity • Novi, MI
 

Commonwealth Fusion raises $1.8BN from Tiger Global

Renewable Energy • Round B • Cambridge, MA
 

Databricks raises $1.6BN from Baillie Gifford

Developer Tools • Round H • San Francisco, CA
 

Articulate Global raises $1.5BN from General Atlantic

EdTech • Round A • New York, NY
 

Sierra Space Agency raises $1.4BN from General Atlantic

Aerospace • Round A • Tahoe City, CA
 

Varo raises $510MM from Lone Pine Capital

Fintech • Round E • San Francisco, CA

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