Software Engineering: Top 20 Investors According to the Sums of Money in Funding Rounds

Intro

The introduction of state-of-the-art technologies and approaches, such as AI, automatization, or VR, and their utilization in various industries fuels software engineering development and the increase of the number of professionals involved in this sector. It includes a range of subdivisions, such as web development, iOS/Android development, quality assurance, quantum computing, etc., and provides a systematic, disciplined, quantifiable approach to software development, operation, and maintenance. Despite the recent disruption caused by the pandemic, this field’s evolution does not seem to decline; as spending on the software itself was projected to reach $517B in 2021, its development will grow at a CAGR of 4%.
The amount of money poured into the software engineering field also proves that investors consider it promising and worth taking the risk. For instance, seed financing in this industry totaled over $389M in 2020, significantly outpacing marketing, media and entertainment, HR, and many other fields. 174.1 billion US dollars, raised over the last five years, make up 3.4% of the money invested worldwide. Twenty of all venture capitals and corporate investors are especially active and can be arranged in the following order according to the sums they contributed:

Software Engineering: Top 20 Investors According to the Sums of Money in Funding Rounds
data provided by Unicorn Nest

Key takeaways

• Funds Geography – Seventeen out of twenty funds are located in North America, more specifically – in the United States (15 VCs) and Canada (2 VCs). Other regions of establishment include Western Europe and Eastern Asia, where the funds come from the United Kingdom and Russia. Five firms operate in New York, whereas others are based in Menlo Park, Toronto, and San Francisco. The lion’s share of financing from the listed companies is attracted by two countries: China and the United States. Commonly, the funds tend to put money into the country they come from.
• Industry Focus – Although the samples funds supported projects in Business Development, Real Estate, and Social spheres, the main flow of investments goes through the Finance industry.
• Important Years -With a 107-year difference between them, the oldest and the newest funds were established in 1908 and 2015, respectively. The majority of the firms emerged in 1997 and accomplished the greater part of their deals from 2012 to 2021. For some, the most fruitful year was 2020. The period with the highest number of successful exits started in 2009 and lasted to 2020 as well; several companies exited the most intensively in 2016.
• Investments – Within a year, the funds can participate in 7-12 rounds with the same probability as in 13-24.While the minimum of rounds per fund is 16 and the maximum is 951, the average value for this figure is 203.2. The mode for this type of financing is 222. For lead investments, the lowest and the highest numbers differ significantly and equal 1 and 276, respectively. On average, the funds choose to lead the deals in 56.0 cases; most commonly, they do so 9 times.  The medians of the standard and lead investments equal 133.5 and 27.0. If calculated in percentage points, the difference between them rests somewhere from -39.75 and 26.96. Its average is -0.75 and the median is 1.32; therefore, some funds from the list act as lead investors more often than others.
• Typical Rounds – Late, Early, and Private Equity stages are more characteristic for the sampled funds to invest at than the Venture stage. Commonly, the round will have 4-5 partakers and a 100-500 million check size. Less often, 5-6 investors will participate, and the amount of money will be reduced to USD 50-100 million. The average multiple for companies, featured in the fund’s portfolio, equals 225425000.74; its maximum is 1186000000.0. Although the zero multiplicator appears quite often, the most common value at the most recent known valuation is 558500000.0. The multiple’s median stands at 2.1.

In summary, VCs and corporate investors who put the most money into the Software Engineering industry are based primarily in the United States, with the UK and Russia following. They usually issue from 100 to 500 million USD and have 4-5 partakers per round while focusing on the Finance, Business Development, Reals Estate, and Social spheres. Most often, they participate in up to 24 rounds annually.