Venture capital firms in the U.S. raised $8.8 billion for 67 funds during the second quarter of 2016, according to a 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 per cent 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.
“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 pe rcent 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.
Total commitments to U.S. venture funds in the second quarter of 2016 was led by Andreessen Horowitz V, which raised $1.5 billion in the largest fundraising commitment of the quarter, and KPCB Digital Growth Fund III which raised $1 billion. Revolution Growth III, and Longitude Venture Partners III each raised $525 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.