July 9, 2013
Venture Capital Funds raised $2.9 billion during second quarter 2013
NEW YORK - U.S. venture capital firms raised $2.9 billion from 44 funds during the second quarter of 2013, a decrease of 33 percent compared to the level of dollar commitments raised during the first quarter of 2013, but equal to the number of funds, according to Thomson Reuters and the National Venture Capital Association (NVCA). The dollar commitments raised during the second quarter of 2013 is a 54 percent decline from the levels raised during the comparable period in 2012 and marks the lowest quarter for venture capital fundraising, by dollars, since the third quarter of 2011. The top five venture capital funds accounted for 55 percent of total fundraising during the second quarter of 2013.
“The second quarter reflects not just the consolidation of the venture capital industry but also the overall contraction of fund size,” said Mark Heesen, president of the NVCA. “Many long-standing, pedigree venture firms are heeding the guidance from limited partners and raising smaller, more agile funds. Consequently, dollar values of capital under management are declining from historical levels. Counterbalancing this trend is the recent uptick in the venture-backed IPO market which, if sustainable, may very well draw more dollars into the asset class in the coming year.”
Second quarter 2013 venture capital fundraising was led by Massachusetts-based Matrix Partners X, L.P. which raised $450.0 million, California-based Scale Venture Partners IV, L.P. which raised $300.0 million and Foundation Capital VII, L.P. which raised $282.0 million.
There were 29 follow-on funds and 15 new funds raised during the second quarter of 2013, almost a 2-to-1 ratio of follow-on to new funds. The number of new funds raised during the second quarter is more than double the number of first-time funds raised during the first quarter of this year, which was atypically low. By dollars raised, follow-on funds accounted for 89 percent of total dollar commitments during the second quarter of 2013. Over the past five years, follow-on fund dollars have accounted for 91 percent of total venture capital fundraising.
The largest new fund reporting commitments during the second quarter of 2013 was Massachusetts.-based Sigma Prime Partners IX, L.P. which raised $115.6 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.
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, NVCA serves as the definitive resource for venture capital data and unites its nearly 400 members through a full range of professional services. For more information about the NVCA, please visit www.nvca.org.