Total Number of Funds Raised in Quarter Falls to Two-Year Low
NEW YORK, NY – U.S. venture capital firms raised $7.0 billion from 61 funds during the first quarter of 2015, a decrease of 24 percent compared to the number of funds raised during the fourth quarter of 2014, but a 21 percent increase by dollar commitments, according to the Fundraising Report by Thomson Reuters and the National Venture Capital Association (NVCA). Venture capital dollar commitments during the first quarter of 2015 declined 30 percent compared to the first quarter of 2014, which saw fundraising commitments surpass $10.0 billion during a three-month period for the first time since 2007. The number of funds raised during the first quarter of 2015 marks the lowest quarter for venture capital funds since the second quarter of 2013.
“The total number of funds raised during the quarter was down significantly from the banner fundraising year we witnessed in 2014. On the bright side, total dollar commitments was higher than the previous two quarters, a clear indication that investor demand for the asset class remains robust after a strong performance in 2014,” said Bobby Franklin, President & CEO of NVCA. “While not the strongest fundraising period by any measure, we are confident investors will continue to renew their commitment to innovation by investing in venture capital. As the year progresses, we will be keeping a close eye on which firms raise the most capital to see if investor commitments are broad-based across the industry or to only a handful of more established firms.”
There were 44 follow-on funds and 18 new funds raised during the first quarter of 2015, a 2.4 to-1 ratio of follow-on to new funds. The number of new funds raised during the first quarter marks a 33 percent decrease from the number of first-time funds raised during the fourth quarter of last year.
The largest new fund reporting commitments during the first quarter of 2015 was from Cambridge, Massachusetts-based F/K/A Ventures Fund I, L.P. which raised $200.0 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.
Total commitments to U.S. venture funds in the first quarter of 2015 was led by Bessemer Venture Partners IX, L.P. which raised $1.6 billion, Flagship Ventures Fund V, L.P. which raised $537.0 million and August Capital VII, L.P., which raised $450.0 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.