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Early Stage VC Fundraising Upward Trend Continues

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November 15, 2012

Preqin is reporting that fundraising to November this year is improving for VC early stage funds, with 58 funds coming to a final close, raising USD 10 billion. This is a distinct upward shift for VC compared to last year’s total USD 8.7 billion, and 2010’s aggregate total of USD 7.1 billion.

 

Preqin said that the largest fund to close so far in 2012 is Andreessen Horowitz Fund III at USD 1.5 billion. The largest fund currently in market is the EUR 300 million is Atomico Ventures’ third fund, managed by a team of entrepreneurs turned investors targeting internet and tech ventures.

 

Just less than half of the 158 early stage VC funds in the market have had at least one interim close, representing an aggregated total of USD 2.5 billion. The US remains home to most of the VC funds in market, with 23% targeting opportunities in Europe, and the rest targeting Asia and Rest of World.

 

We take it that the ability of some VCs to close new funds is based on improved returns, but that information is not easily accessible for journalists. What we do get are clues and pointers to where such datasets can be found. For example, a dataset released by Correlation Ventures to  LifeSciVc shows that indeed realized returns have been steadily improving over the past several years (see graphic above).

 

The top decile of VC financings is delivering 4X multiples, while the top 1% are actually delivering 15X. No further details on what, who, or where the top 1% invest are located, except to say that it was in the US market. Correlation Ventures is a new VC fund manager in California that primarily co-invests with established lead VCs, and promises to make decisions within two weeks, according to its website. (Image source: Correlation Ventures)

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