The term “startup” recalls images of scanty entrepreneurs tirelessly to finance their early visions.
However, the growing share of what we call startup financing does not appear to be this, does not appear to be this.
Rather, it consists of investors who pour billions or tons of of tens of millions on firms that already have valuations similar to successful public firms and often have large, fixed revenue streams.
Last yr, investors placed a total of $ 61 billion in rounds in the amount of $ 500 million or more for American firms supported by American private firms, show Crunchbase data. This includes as much as 34% of complete financing. This is the highest participation for years, like the chart below.
Older startups
While some of these giant rounds concerned ambitious startups at the early stages, most of them went to firms that were about time and are already well-known. It includes DatabicksIN OpenaiIN Waymo AND Epic gameswho attracted almost $ 24 billion last yr.
To illustrate the startup age failure, we developed a list of 11 largest financing recipients last yr, who were founded nine or more years ago.
In general, greater than half of the entire capital from rounds of $ 500 million or more went to firms for over nine years, according to Crunchbase data.
These are not only giant offers that are distorted in this manner. Financing from rounds of all sizes is increasingly favorable to older startups. According to Crunchbase data, 37% of American funds at the start last yr went to firms for over nine years. This is the largest share for firms of a comparable age for at least five years.
With a free exit, it is not surprising
The growth of giant rounds for older startups appears in a weak IPO technological environment and large acquisitions. This is not very surprising. Companies that determine to remain private, still want or need capital to finance the expansion, along with secondary offers to ensure liquidity to employees and earlier supporters.
We saw it last week with Stripewho announced tender offer With a valuation of $ 91.5 billion addressed to current and former employees along with a plan to buy back. Established in 2010, Stripe is famous for reluctance to IPO.
So far, 2025 has not brought us a large number of supergInts for older startups. We also do not see many merger offers and acquisitions with large tickets or public offers. My guess is that investors have some waiting and seeing pattern, with a special eye on whether the IPO market will happen this yr.
If not, we’ll probably see a return to really large private funds for older startups.