TechConnect: A Record-Setting Year for Arlington Venture Capital

January 25, 2022 | By Adam Henry

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This month’s TechConnect profile has taken a break from company profiles to highlight the substantial accomplishments in venture activity for 2021. Venture activity continues to play a critical role in the national landscape of new emerging technologies and to Arlington’s thriving innovation ecosystem, providing capital and strategic investment opportunities for startups and high-growth ventures to fuel their expansions.

The 2021 calendar year brought continued uncertainty with the COVID-19 pandemic’s delta and omicron variants, growing inflation, and sustained global supply chain issues that impacted many sectors including hospitality, restaurants, and construction. On a positive note, the venture capital community experienced a record-breaking year in 2021, bringing promise to the emerging technologies at a national and local level. 

Looking at the national level, U.S. venture capital activity had a banner year in several metrics. According to a press release by the National Venture Capital Association (NVCA), the Pitchbook-NVCA Venture Monitor, a quarterly report produced by Pitchbook and the National Venture Capital Association with support from Insperity, highlighted the following record-breaking metrics in VC activity: 

  • The U.S. VC industry saw $329.9 billion invested across an estimated 17,054 deals, a record deal count and double 2020's previous deal value high; 
  • Investors raised an unprecedented $128.3 billion, passing the $100 billion mark for the first time; 
  • Total 2021 exit value was over $774.1 billion, representing an astonishing 168.0% year-over-year growth; and 
  • The median and average fundraising value in 2021 also saw a notable jump to $50 million and $188.1 million, respectively, a significant increase over 2020’s median and average fundraising value of $42.1 million and $156.9 million. 

Regionally, the Metro Washington DC area saw 415 deals (118.9% YoY Growth) totaling $5.2 billion invested (200.2% YoY Growth) in venture capital activity. With the substantial increase in the region’s VC activity, Arlington-based businesses continued to thrive with venture capital raises, mergers and acquisitions, and initial public offerings (IPOs) which equate to more commercial leases and employment for the community. According to data collected from Pitchbook.com and independent media sources, Arlington-headquartered companies were involved in more than 30 deals totaling more than $2.5 billion from venture capital raises, mergers and acquisitions, strategic corporate investments, and other activity.  

Specifically, venture capital provides investment for startups and high growth ventures that show long-term growth potential which in turn creates a larger industry cluster and generates more employment opportunities in the growing technology sector in Arlington and throughout the region. In 2021, Arlington companies were involved in 21 venture capital deals totaling over $367.8 million. The most notable raise of the year was Interos’ July 2021 $100 million Series C raise, enabling the company to join an elite group of only 4% of ‘unicorn’ startups not only nationally valued at more than $1 billion but also led by a female founder-CEO. Some other notable raises among Arlington-based companies last year include: 

  • SCYTHE, a local cybersecurity startup, raised $10 million in Series A funding led by Gula Tech Ventures and Paladin Capital Group; 
  • Cybersecurity startup Shift5 announced it raised $20 million in Series A funding led by 645 Ventures, with participation from Squadra Ventures, General Advance, and First In; 
  • Local food tech startup Hungry Marketplace announced it raised $21 million in Series C financing from multiple high-profile investors; 
  • Fintech startup Rize announced it raised $11.4 million of Series A venture funding in a round led by Alpha Edison and Morpheus Ventures; 
  • Geospatial data and analytics company Fraym announced $7 million Series B financing to further scale their AI/ML software; 
  • WireWheel, a data privacy technology company, announced $20 million in Series B financing to speed up its go-to-market plans and establish its leadership position in SaaS; and 
  • Stacklet announced it raised $18 million in Series A funding for its cloud governance platform. 

In addition to the dynamic venture capital activity, Arlington companies were also involved in some notable mergers and acquisitions and IPOs.  

  • Arlington-based Fluence Energy announced pricing of its Initial Public Offering (IPO), which went on to raise close to $1 billion; 
  • Privia Health, a technology-driven, national physician-enablement company based in Arlington, announced an IPO that raised $448.5 million; 
  • Arlington-based Halfaker and Associates was acquired by Science Applications International for $250 million on July 2, 2021; and 
  • Arlington-based Gibbs and Cox was acquired by Leidos for $376 million on May 7, 2021. 

Despite another turbulent year for business, Arlington-based companies continue to shine in venture activity, which contributes towards establishing the community as a major innovation and entrepreneurial hub nationally. As we continue to see more companies launching, Arlington is excited about the prospects of 2022 for startups to raise capital, scale, and grow into established companies.  

About this Profile Series  

Arlington's startup ecosystem has been rapidly expanding over the past five years and is quickly becoming recognized as an established innovation hub in the United States. Since 2015, Arlington-based companies have raised over $1.3 billion in venture capital covering several industries, including software, artificial intelligence, cybersecurity, fintech, big data, digital media, and more. AED launched its monthly TechConnect Profiles to highlight and profile companies in our technology startup ecosystem.  

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