Global venture capital investments may surge next year on demand for late-stage company mega-deals, juiced by the addition of nontraditional investors like pensions, hedge funds and mutual funds, a report predicted.

“2020 will mark a new annual record for US mega-deals,” PitchBook predicted in its 2020 Venture Capital Outlook Report without giving a specific amount. Startups raised $253.5 billion in venture capital in 2019, with 44 mega-deals that raised no less than $500 million. It’s the second highest in history, 11% lower than 2018’s record $285 billion.

Nontraditional investors were considered “tourists” in VC as they tended to invest “massive sums with less regard for the ultimate price paid for the stake.” They’ve dramatically boosted their exposure over the past five years: they spent over $100 billion in 2,965 VC deals in the U.S., more than twice that of 2014. Low interest rate for fixed income, well-performing VC funds and increased venues for exit are driving their increased involvement.  

This year 66 new VC-backed unicorns emerged in the U.S., compared to 58 last year, according to market data firm CB Insights. Despite WeWork’s catastrophic IPO, unicorn exit values more than tripled in the first six months of this year over 2018, according to PitchBook’s 2019 Unicorn Report.

In addition to traditional IPOs, investors exit their investments or obtain more liquidity from direct listings and secondary markets. Online messaging platform Slack and music streaming service Spotify both chose direct listings over traditional IPOs. Airbnb, the next unicorn widely expected  to go public, expressed preference for this method as well. 

“The main benefits of a direct listing are compelling — auction-based pricing, flexibility to sell and democratization of allocation,” Nick Giovanni, head of global technology, media and telecom investment banking at Goldman Sachs, told the Financial Times in an interview.

Another way for VC to achieve liquidity with an aging portfolio are secondary transactions, or buying and selling securities in private companies in private transactions. Softbank Group is an active buyer in the VC secondary market. Some Uber investors including Benchmark Capital sold part of their equity to Softbank for an estimated $8 billion in January.