Venture Capital Firms Raise $8.8 Billion in Second Quarter

NEW YORK — U.S. venture capital firms raised $8.8 billion for 67 funds during the second quarter of 2016, according to the Fundraising Report by Thomson Reuters and the National Venture Capital Association (NVCA).  The number of funds closed during the quarter was on par with the first quarter of this year, while dollar commitments registered a 37 percent decrease compared to the first quarter of 2016, which ranked as the strongest quarter for dollars raised by U.S. venture capital firms since the second quarter of 2006 when 79 funds raised $14.3 billion.

Year/Quarter Number of Funds Venture Capital ($M)
2007 235 29,993.7
2008 214 25,054.9
2009 162 16,103.8
2010 176 13,283.6
2011 192 19,080.5
2012 219 19,906.9
2013 210 17,760.1
2014 274 30,974.7
2015 249 28,730.2
2016 126 22,860.3
2Q’15 82 11,084.8
3Q’15 67 4,600.4
4Q’15 53 5,507.0
1Q’16 67 14,048.0
2Q’16 67 8,812.3

Source: Thomson Reuters and National Venture Capital Association
*Fund commitments closed across multiple quarters are represented as one fund in the annual totals

“After reaching a ten year high at the start of the year, fundraising was expectedly down during the second quarter.  Nevertheless, total fundraising for the quarter was strong compared to recent quarters, setting us on a nice pace for what we expect to be a solid fundraising year,” said Bobby Franklin, President and CEO of NVCA.  “As the fundraising environment continues to improve, it’s clear that venture capital remains a strong investment option for limited partners who want to get in on the ground floor of innovation.”

There were 48 follow-on funds and 19 new funds raised during the second quarter of 2016. The number of new funds raised during the second quarter marks a 19 percent increase from the number of first-time funds raised during the first quarter of 2016.  The number of follow-on funds raised during the quarter fell six percent compared to the previous quarter.

The largest new fund reporting commitments during the second quarter of 2016 was from Boston, Massachusetts-based Liberty Mutual Strategic Ventures, which raised $150 million for its inaugural fund.  A “new” fund is defined as the first venture capital fund at a newly established or existing firm.

Year/Quarter No. of New No. of Follow-on Total
2010 42 134 176
2011 59 133 192
2012 73 146 219
2013 68 142 210
2014 111 163 274
2015 87 162 249
2016 32 94 126
2Q’15 34 48 82
3Q’15 18 49 67
4Q’15 24 29 53
1Q’16 16 51 67
2Q’16 19 48 67

Source: Thomson Reuters and National Venture Capital Association

Total commitments to U.S. venture funds in the second quarter of 2016 was led by Andreessen Horowitz V, L.P., which raised $1.5 billion in the largest fundraising commitment of the quarter and KPCB Digital Growth Fund III LLC which raised $1.0 billion.  Revolution Growth III, L.P. and Longitude Venture Partners III, L.P. each raised $525.0 million during the second quarter of 2016.  The top five funds raised during the second quarter of the year accounted for 45 percent of the overall total, up from 39 percent for the top five funds raised during the first quarter of 2016.

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.