• Online investment funding in October 2020 came in at $32 million, up 71.6 percent from October 2019.
• 7 new “crowd unicorns” (defined as online investment issuers who raised in excess of $1 million online in a single offering from online investors) joined the board in October, this tied for the fourth highest month for the year. The enterprise value of these new crowd unicorns is $143,328,000.
• New offerings were up (116 vs 97 in September) but not as strong as the month of July (130).

Online Investment Funding by Month through October 2020
Includes Regulation Crowdfunding and Parallel 506c Offerings

• In October, seven new crowd unicorns joined CCA’s list of startups that raised $1 million or more.
• August had 11 crowd unicorns
• July and September each had 9.
• The most highly valued October crowd unicorns were:
  • San Diego-based Pacific Integrated Energy, a company creating new solar energy markets
  • This Way Global an Austin-based company that matches people with jobs;
  • Boston-based Beanstox, an app that makes investing easy; and
  • College Park, Maryland-based Airgility, a manufacturer of AI powered aerial robots for public safety, security and defense.

Interestingly enough, only 4.3% of all crowd unicorns in 2020 have come from Silicon Valley proving that online investing is democratizing access to capital by allowing investors all over the United States to invest in local businesses they believe in.  Together these October crowd unicorns have raised $8.2 million and added $143.3 million in valuation to the crowd unicorn board. The crowd unicorn board collectively has almost $1 billion in enterprise value.

7 New Crowd Unicorns in October 2020

• That was up 62.5% over the first 10 months of 2019, when investors spent $110.6 million.
• The number of investors for the first 10 months of 2020 was 295,000 which was up 80% from 164,000 in 2019.
• Average investment decreased 9.6% from $674 in 2019 to $609 in 2020 due to the increase in retail investors.

So, while the pandemic raged, online investment increased dramatically, the number of investors nearly doubled and issuers around the United States were able to find critical capital to help them during this time of crisis.

Rounds of $1 million and more represented 25.6 percent of invested dollars in October 2020 – lower than October 2019 at 32.9 percent – per CCA data. This means that more capital is going to more offerings that are raising less than $1 million in 2020. This would support the theory that more businesses are turning online for capital from local investors where the government stimulus programs have come up short. We’ve noted in other reports that local investors have been particularly active through the pandemic. Overall, $1 million-plus rounds have accounted for a slightly lower percentage of total funding this year, at 32.2 percent, than last year, when such megarounds represented 32.7 percent of funding.

Mega Valuations
During 2020 two companies leveraged online investing that had valuations in excess of $100 million. West Hollywood-based crowdfunding platform StartEngine raised $685k at a $190 million post-money valuation. This is their fourth Regulation Crowdfunding offering. Their first one, which closed on March 2019, had a $120 million post- money valuation. Their success shows their understanding of how to leverage online investors not only for themselves but others on their platform.  New York-based Fruit Street Health, a telemedicine service raised $41k at a $104 million post-money valuation.

Election slowdown won’t last
With the U.S. election looming, we saw a slowdown in funding in the first week of November. But, with the markets and liquidity up, we expect capital will still be deployed at a strong clip through the end of the year. From a funding perspective, October was also the strongest month for investments last year as well. With the proposed SEC changes that increase the amounts companies can raise online we only expect the number of firms raising money online and investors backing them to increase.