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Venture Capital

Venture Capital Hits Record High in U.S. in 2020

Venture capital-backed firms in the United States raised close to $130 billion in 2019, CB Insight showed on Friday.

The investment total is up 14% from last year, while the number of deals is down 9% to 6,022. “Mega-rounds,” or deals that are $100 million or higher, also hit a record amount. Besides, a number with $63 billion raised in 318 deals.

CB Insights chief executive Anand Sanwal wrote that seeing is a ‘rich get richer’ phenomenon. That is where successful, high momentum technology companies are vacuuming up most of the financing. 

Moreover, Sanwal said that data showed a big decline in a very early stage investment called the seed stage. He anticipated some of those firms that stand out to see “insatiable investor demand.” That is with fewer competitors for the money.

The trend of big investments is not likely to slow in 2021. Some venture capitalists say there is much capital chasing investments.

Quantum Metric said it raised $200 million in its latest financing round, which values the company at over $1 billion. It (NASDAQ:QMCO) is a startup that provides customer analytics and improvement tools for online businesses.

Furthermore, last year, many of the mega-rounds were raised by tech companies as they boosted the pandemic. It drove up remote work and e-commerce.

China’s Pig Futures Sink on the First Day 

Meanwhile, in other news, live hog futures in China tumbled on their first trading day after an expected debut. The industry is looking for a safeguard against wild swings. They were triggered by one of the world’s worst animal disease outbreaks.

Moreover, on Friday, the Dalian Commodity Exchange contract slid as much as 9%. 

After some 20 years in the planning, the product aims to provide a key hedging tool for hog breeders. Those who are recovering and expanding production. A deadly African swine fever outbreak destroyed local herds and drove prices to a record.

Furthermore, the country accounts for almost half of global pork consumption and production. That has a market value of about 2 trillion yuan ($310 billion). 

The meat in their diet and its implications for national food security is important for the Chinese. Their government has moved to modernize hog production, improve quality and cut costs. Accelerating the push was the African swine fever outbreak in 2018-19.

The virus wiped out small backyard pig farms, forcing a shift toward large-scale operations. They are in a better position to trade the contract and manage their risks. 

The futures contract will help promote the standardization of hog breeds. This is to meet the exchange’s delivery rules and specifications. The contract will be the first product in China to allow deliveries of live animals.

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