U.S. VC firms post strongest quarter in 10 years with $12 bln Q1 raise

U.S.-based venture capitalists started 2016 with a bang, raising more money during the first three months of the year than in any quarter in 10 years.

Together, 57 funds collected almost US$12 billion, more than double the level of the fourth quarter and a 59 percent jump from first-quarter 2015, according to a report from the National Venture Capital Association and Thomson Reuters.

The number of funds raising capital fell 17 percent from last year’s first quarter.

The quarterly total of US$11.99 billion was the most since U.S.-based firms raised US$14.38 billion in the second quarter of 2006. The only other stronger quarters date to the dot-com bubble years of 1999, 2000 and 2001.

The active quarter is likely to reignite worries of over-funding as top venture firms return to the market to raise successive funds at a rapid pace. Fundraising had tailed off during the second half of 2015 as investment activity slowed.

But this quarter could be the first in nine quarters when money raised exceeds or nearly matches money invested.

The quarter saw 43 follow-on funds and 14 new funds. Top funds raised in the quarter include Founders Fund VI, which attracted US$1.3 billion, followed by Accel Growth Fund IV and Norwest Venture Partners XIII, both of which raised US$1.2 billion. The largest new fund was Los Angeles-based 1955 Capital, which gathered US$200 million.

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