2018 Stealth Capital Report: Tracking Hidden Billionsby@hdubugras
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2018 Stealth Capital Report: Tracking Hidden Billions

by Henrique DubugrasFebruary 12th, 2019
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It should come as no surprise that investment in tech startups is booming. Early stage startups are on-pace to reach over $8 billion dollars of funding this year in 2018, while late stage startups are receiving over $70 billion.

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It should come as no surprise that investment in tech startups is booming. Early stage startups are on-pace to reach over $8 billion dollars of funding this year in 2018, while late stage startups are receiving over $70 billion.

But what does this mean for startups in stealth? If you haven’t heard of a startup, does it even really exist? Are credible startups with real venture dollars remaining in stealth for longer as they build their technology?

What we’ve seen at Brex is that the stealth startup economy is thriving. Brex has identified over $1.43B in stealth capital outstanding, with the vast majority raised in the last two years. These stealth startups make up 3–5% of the overall startup market. And some of the most high profile startups in Machine Learning, Autonomous Driving, and Fintech are announcing large capital raises directly out of stealth.

So where are VCs investing their dollars the most? We did a comprehensive analysis of thousands of companies to see what are the major trends in terms of which industries are getting funding — and which are not.

Stealth Capital

*click to expand graphics

What’s Hot

Last year, VCs predicted that the top industries that would see investment were: Artificial Intelligence, Robotics, Fintech, and Security. Were these predictions applicable to stealth companies, and if not, what were the top 5 industries in stealth for VC investment? Here’s what we found among startups in stealth:

  • Financial Services saw the highest amount of stealth VC investment this year
  • Healthcare came in at #2. Surprisingly, VCs invested in 23% fewer companies in this space than the #1 spot
  • Consumer & Enterprise Software is the 3rd fastest growing industry in stealth
  • Real Estate and Biotechnology round out the top of the group
  • Artificial Intelligence and Security are among the top 40th percentile of stealth VC investment

What’s Not

So where was VC investment in stealth startups light this year? Depending on who you ask, less VC funding in specific industries could signify a great market opportunity for emerging startups in 2019. Reviewing the findings of our data, there were some surprises.

Here were the industries with the least amount of stealth startup investment in 2018:

  • Natural Resources, Government Technology, and Operating Systems were all tied as bottom performers in terms of VC investment this year
  • The Event Technology space saw a slowdown in VC funding
  • Video, Messaging, and Technology as well as Content and Publishing also saw light investment this year
  • Gaming saw less investment in 2018, part of an overall decline in gaming investment since 2014, and a shift towards investment in gaming in the VR space


Operating in stealth is a tactic many startups use strategically, often to develop more complex technologies, protect intellectual property, or increase interest in their product before their public release. While some have speculated that investing in stealth is risky, our findings reveal that VC funding in stealth startups show no sign of slowing down.

As an emerging startup, it can be difficult to gain a full line of sight into your industry — especially when many others might be operating in stealth mode. For startups in stealth, we hope this analysis sheds light on just how many of you are out there and how large of an impact you have on the venture world.


Brex analyzed thousands companies. We compared these companies with comprehensive outbound databases of known startups — including sources like Crunchbase. If a company existed in our signups, but not in our outbound database, then we classified the startup as in stealth. We found that over 3% were in stealth.

Because we are a corporate credit card, we have access to our client’s financial activity including capital raising. We used the max value across all bank accounts to determine the amount of funding they have received. We aggregated this capital over each stage and imputed a similar distribution to the total probable stealth market, giving us $1.43B in total early stage stealth capital. Companies who asked that their data not to be shared were not used, and any company that does not wish to share its data for future aggregated analysis may request to exclude it from being shared in the aggregate.