ESTABLISHED U.S. VENTURE FIRMS QUICKLY RAISE FUNDS IN 1ST QUARTER

Dow Jones LP Source: Fund-raising climate improves for smaller funds;European venture fund-raising rises 8%

Several well-established venture firms made fund-raising look easy in the first quarter, holding first and final closes for their funds. These large closes helped push U.S. venture capital fund-raising to $7 billion across 47 funds in the first quarter, a 5% increase in capital raised and a 34% increase in fund closings from the same period last year, according to Dow Jones LP Source.

European venture funds raised $954 million for 11 funds, an 8% increase in capital raised for the same number of fund closings compared to the first quarter of last year. The gain in capital raised tracks well behind the 82% rise in capital committed to European private equity funds overall, which includes venture capital.

“A few big firms continue to have no trouble raising large funds, as limited partners are sticking with what they see as safe bets when making their venture allocations,” said Zoran Basich, editor of Dow Jones VentureWire. “But small firms are also finding some receptive LPs interested in investing in niche spaces, such as education, or specific geographic areas.”
LPs Look at Smaller Funds in U.S.

In the U.S., 23 early-stage funds raised $1.6 billion, 35% more fund closings and nearly triple the amount of capital raised during the first quarter of last year. While just three early-stage funds accounted for 79% of the total, 12 funds targeting $50 million or less held final closings during the first quarter showing that limited partners are taking time to look at smaller funds with strong track records.
Multi-stage fund-raising had a strong start to the year as 17 funds raised $5 billion, a 13% increase in fund closings and 19% increase in capital raised. Two firms—Andreessen Horowitz and Tiger Global Management—accounted for more than half of the capital raised despite the fact that both raised their last funds less than two years ago.

With no large fund-raisings to boost the total, capital committed to later-stage funds fell 77% to $449 million despite seven funds holding closings in the first quarter, compared to three in the same period last year.
LPs in European Funds Focus on Early-Stage Vehicles

In Europe, early-stage funds garnered most of the capital, raising $769 million across eight funds, an 8% decline in capital committed from the same period last year.

Capital committed to multi-stage funds more than doubled to $105 million for two funds. One debenture fund raised $79 million during the first quarter.
Later-stage funds did not hold any closings, which is not uncommon for the region.