Venture Capital fundraising of $5 bln represents slow fourth quarter

Venture capitalists in the United States raised just $5 billion in fourth quarter of last year, a second quarter in a row of slow fundraising, according to a report from the National Venture Capital Association and Thomson Reuters. The soft quarter will help keep a lid on overfunding in the industry.

Still, VCs raised $28.2 billion for all of 2014. That total is down 9 percent from the previous year, but still the second strongest performance in eight years.

The number of new funds raised was down 25 percent last year.

PRESS RELEASE

Venture Capitalists Raise $5 billion in Fourth Quarter, $28 Billion for Year

Strong Fundraising Pace from 2014 Continues in 2015

NEW YORK, NY – U.S. venture capital firms raised $5.0 billion for 46 funds during the fourth quarter of 2015, a nine percent increase by dollar commitments from the third quarter and a 25 percent decrease in number of funds raised, according to the Fundraising Report by Thomson Reuters and the National Venture Capital Association (NVCA).  Venture capital dollar commitments during full year 2015 totaled $28.2 billion, down nine percent compared to full year 2014 but much higher than the $17.7 billion and $19.9 billion raised in 2013 and 2012 respectively and higher than the yearly average of $20.32 since 2006.

 

Year/Quarter	Number of Funds	Venture Capital ($M)
2006	236	31,107.6
2007	235	29,993.7
2008	214	25,054.9
2009	162	16,103.8
2010	176	13,283.6
2011	192	19,080.5
2012	218	19,904.9
2013	209	17,753.4
2014	271	31,094.4
2015	235	28,151.7
4Q’14	85	6,205.6
1Q’15	69	7,537.8
2Q’15	81	11,081.7
3Q’15	61	4,562.5
4Q’15	46	4,974.1

 

Source: Thomson Reuters and National Venture Capital Association

*Fund commitments closed across multiple quarters are represented as one fund in the annual totals

“Building on the strong pace set last year, 2015 emerged another strong fundraising year for the industry.  In the last two years alone, close to $60 billion has been raised for deployment to the entrepreneurial ecosystem to help build and grow the next generation of great American companies,” said Bobby Franklin, President and CEO of NVCA.  “Overall, the fundraising environment is quite healthy.  It’s been encouraging to see such a diverse mix of fund sizes in recent quarters, which demonstrates to us that the fundraising environment is becoming a lot more favorable for firms of all shapes and sizes.”

There were 26 follow-on funds and 20 new funds raised during the fourth quarter of 2015. The number of new funds raised during 2015 marks a 25 percent decrease from the number of first-time funds raised during 2014.  The number of follow-on funds raised during the year fell five percent compared to a year ago.

The largest new fund reporting commitments during the fourth quarter of 2015 was from

Washington, DC-based Accion Frontier Inclusion Fund, L.P., which raised $90 million for the firm’s inaugural fund.  A “new” fund is defined as the first fund at a newly established firm, although the general partners of that firm may have previous experience investing in venture capital.

 

Year/Quarter	No. of New	No. of Follow-on	Total
2010	51	125	176
2011	60	132	192
2012	73	145	218
2013	66	143	209
2014	106	165	271
2015	79	156	235
1Q’14	34	39	73
2Q’14	24	61	85
3Q’14	28	44	72
4Q’14	30	55	85
1Q’15	21	48	69
2Q’15	33	48	81
3Q’15	15	46	61
4Q’15	20	26	46

 

Source: Thomson Reuters and National Venture Capital Association

Total commitments to U.S. venture funds in the fourth quarter of 2015 was led by Tiger Global Private Investment Partners X, which raised $2.5 billion in the largest fundraising commitment of the fourth quarter and the second largest fundraising during 2015.  Trinity Ventures XII, L.P. raised $400 million during the fourth quarter and USVP XI raised $300 million.

Methodology

The Thomson Reuters/National Venture Capital Association sample includes U.S.-based venture capital funds.  Classifications are based on the headquarter location of the fund, not the location of venture capital firm.   The sample excludes fund of funds.

Effective November 1, 2010, Thomson Reuters venture capital fund data has been updated in order to provide more consistent and relevant categories for searching and reporting.  As a result of these changes, there may be shifts in historical fundraising statistics as a result of movements of funds between primary market & nation samples and/or between fund stage categories.

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About National Venture Capital Association

Venture capitalists are committed to funding America’s most innovative entrepreneurs, working closely with them to transform breakthrough ideas into emerging growth companies that drive U.S. job creation and economic growth.  As the voice of the U.S. venture capital community, the National Venture Capital Association (NVCA) empowers its members and the entrepreneurs they fund by advocating for policies that encourage innovation and reward long-term investment.  As the venture community’s preeminent trade association, the NVCA serves as the definitive resource for venture capital data and unites its over 300 member firms through a full range of professional services.  For more information about the NVCA, please visit www.nvca.org.