Despite a slowdown in activity in the fourth quarter, U.S. venture capitalists raised more than $40.5 billion for new funds in 2016 for the first time since the peak of the dot-com bubble in 2000.
The year saw 265 funds raise $40.5 billion, a 38 percent jump in dollars from 2015 when $29.3 billion was raised by 266 funds, according to a VCJ analysis of the data from Thomson Reuters.
Last year showed remarkable strength considering exit markets were generally weak. In only three years since 2001 have U.S. venture firms raise more than $30 billion and the largest of those years, in 2006, saw just $31 billion raised.
The year saw eight firms — Technology Crossover Ventures, Accel Partners, Andreessen Horowitz, Breakthrough Energy Partners, Kleiner Perkins Caufield & Byers, Norwest Venture Partners, Greylock Partners and Founders Fund — each raise funds of $1 billion or more. The top 8 funds accounted for 27 percent of all U.S.-base fundraising in 2016.
In 2015, just four U.S.-based venture firms raised funds of $1 billion or more.
In addition, GGV Capital, Lightspeed Venture Partners and Spark Capital each collected $1 billion or more in capital commitments in 2016 by raising multiple funds.
The year’s performance reflects broad enthusiasm for the asset class not just from existing LPs, but from new LPs in the United States and abroad.
In the fourth quarter, VCs raised more than $7.2 billion for 65 funds, the slowest quarter of the year, the data show. Dollars raised were off 22 percent from the third quarter.
The fourth quarter saw large funds from Greylock Partners, which raised $1 billion, and Breakthrough Energy Ventures, which raised $1.08 billion and was formed by Bill Gates, Jeff Bezos, John Doerr, Jack Ma, Vinod Khosla and others.
Third Rock Ventures and ARCH Venture Partners also raised significant funds in Q4.
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