76% of the money startups raise is not from traditional VCs. Here are the biggest nontraditional investors of 2021.

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Jeff Horing
Jeff Horing co-founded Insight Partners in 1995 and is also a managing director. The firm has been the most active nontraditional investor this year.

  • Nontraditional investors deployed 76% of all venture dollars in the second quarter.
  • Insight Partners has been the most active, doing 70 deals this year alone.
  • Coatue Management backed Didi Global, Rivian, and UiPath – which all went public this year.
  • See more stories on Insider’s business page.

It’s an open secret in the industry: Most venture dollars don’t actually come from traditional venture capital firms.

Nontraditional investors – a sweeping category that includes private equity, mutual funds, and corporations – deployed a record $57 billion worth of venture investment in the second quarter, which represented 76% of all venture dollars spent, according to a new research note from Pitchbook.

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“What is interesting about the wave of activity is that these firms doubled down on venture, surpassing the pace of pre-pandemic investment more quickly than expected,” wrote analyst Kyle Stanford.

All of that money is being “aggressively invested” which is “increasing competition for deals,” he added. The net result is that startup founders are raising more money for smaller chunks of equity in their company, at higher valuations.

Here are the nontraditional investors who have made the most deals in 2021, according to Pitchbook:

  • Insight Partners (70)

The New York private equity firm, with $30 in assets under management, has backed over 400 companies since 1995, including Twitter in 2019 and DocuSign in 2017. This week alone, it led Employment Hero’s $140 million Series E and Choco’s $100 million Series B.

  • Coatue Management (57)

The New York hedge fund manages $48 billion in assets. It backed Didi Global, Rivian, and UiPath – which all went public this year. It was also an early investor in Doordash, which went public last year. Coatue’s newer bets include Mercury, a banking startup valued at $1.6 billion, and Choco.

Alphabet’s early-stage venture capital arm, formerly known as Google Ventures, has been the most active nontraditional investor over the last decade doing 843 deals. This corporate fund backed Insurtech, Ethos, and Incorta this year.

  • RA Capital Management (37)

The multistage investment manager focusing on healthcare and life science companies recently co-led Hemab’s Series A and Ventus Therapeutics $100 million Series B.

  • Fidelity Management (36)

The mutual giant doubled down on scooter startup Bird this year, anchoring Bird’s $200 million PIPE (private investment in public equity) financing. Fidelity also invested in Astranis’ $250 million Series C.

  • T. Rowe Price (32)

The global investment management firm was part of Capsule’s $300 million Series D and in April was among the investors who pumped a billion dollars into Epic Games the same month.

  • Coinbase Ventures (32)

Coinbase’s venture arm invests in crypto and blockchain startups. It recently backed the mobile game developer Bling and the crypto firm FTX, which is valued at $18 billion.

  • Valor Equity Partners (30)

The Chicago private equity firm led Little Spoon’s $44 million Series B this week. Last week, it co-led Genvid Holding’s $113 Series C.

  • Casdin Capital (30)

The healthcare-focused hedge fund was part of LetsGetChecked’s $150 million May late-stage financing and also backed Dyno Therapeutics $100 Series A led by Andreessen Horowitz the same month.

  • Alexandria Venture Investments (30)

The Pasadena-based corporate venture capital arm of Alexandria Real Estate Equities focuses on biotech. It recently backed Wugen’s $172 million Series B and Axonis’ seed round.

https://markets.businessinsider.com/news/stocks/76-of-vc-dollars-come-from-nontraditional-investors-heres-most-active

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