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Technology-Focused Fundraising Setting the Pace in Venture Capital – October 2014

by Kamarl Simpson

  • 10 Oct 2014
  • PE
  • VC

Preqin’s Funds in Market online service reveals venture capital fundraising so far in 2014 has already surpassed the level of capital raised in 2013 with 201 funds closing, amassing almost $32bn in capital commitments so far this year. Average fund size is up 28% on 2013 ($131mn); owing to the fact more capital has been raised by significantly less venture capital funds in 2014 when compared with 2013.

As the graph above shows, the technology and healthcare industries have generally attracted the greatest level of investment from venture capital fund managers. Technology especially has remained at the forefront of innovation and development in a growing digital culture. Throughout 2013, venture capital funds with a primary focus on technology and healthcare raised $14bn and $6bn respectively, accounting for 66% of the aggregate capital raised in the year. Technology-focused fundraising has maintained momentum in 2014. The aggregate $16.4bn raised by these funds represents just over 50% of the total capital raised by all venture capital funds so far in 2014. The largest technology-focused venture capital fund to close so far this year is the $1.5bn Andreessen Horowitz Fund IV. The fund targets both early stage and later stage deals, primarily in North America.

North America-focused venture capital funds remain the most prominent on the fundraising landscape. One-hundred and eleven North-America focused funds closed, having raised $17.7bn so far this year. Europe-based venture capital fundraising has remained low, with 36 funds securing $3.5bn in total. On the other hand, Asia-focused venture capital fundraising has seen a significant increase in 2014 with $8.7bn raised, representing a 255% increase on the $3.4bn raised in 2013.

Out of the $61.4bn currently sought by 579 venture capital vehicles in market, $28.2bn is accounted for by funds with a technology or healthcare focus. Of the venture capital funds in market, 37% have held at least one interim close, with commitments standing at $8.8bn. Nearly half of the interim close capital is targeting investments in the technology or healthcare space. 

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