Early Stage Venture Capital Fundraising – October 2013

by Kamarl Simpson

  • 14 Oct 2013
  • PE

One hundred and ninety-six early stage venture capital funds are currently raising capital with a collective target of $15bn, according to Preqin's Funds in Market product. Both the number of early stage funds in market and aggregate capital sought has increased in comparison to the same point last year, in which 153 early stage vehicles were in market seeking $12bn. Of the early stage funds currently in market, 69 have already held at least one interim close and aggregate capital commitments currently stand at just over $2.1bn. Early stage vehicles with a primary focus on the technology and healthcare industries account for the largest amount of targeted capital, representing 37% ($5.5bn) and 17% ($2.8bn) respectively.

In terms of geographical fund focus, 56% of the early stage investment vehicles currently in market predominantly target opportunities in North America; 22% primarily seek investment opportunities in Europe; 10% in Asia and the remaining 12% invest other regions. The largest early stage fund currently in market is Invention Investment Fund III. Managed by Intellectual Ventures, the fund is seeking $3bn in capital commitments to back new ideas, inventions and technologies that are at a very early stage of development. The third fund in the series will purchase patents, patent licensing rights and applications as well as other invention rights.

So far this year 76 early stage venture funds have reached final closes, having collectively raised $7.4bn. One of the largest early stage vehicles to close this year is Third Rock Ventures III. The vehicle raised $516mn and focuses on start-ups and growing life sciences companies, primarily in biotechnology, bio-pharmaceutical, and medical device sectors.

In 2012, 101 early stage venture capital funds reached final close, having raised an aggregate $12.8bn. This demonstrates a continued upward trend for the fund type, following 90 early stage funds holding a final close during 2011 having raised $8.6bn, and 85 funds closing during 2010 with an aggregate total of $7.6bn in capital commitments. The largest fund to close in 2012 was Andreessen Horowitz Fund III, which collected $1.5bn in capital commitments, surpassing its target of $900mn. The fund closed in January 2012 and targets technology-focused firms that operate across North America.

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