Despite the returns of other private equity strategies outperforming venture capital funds over the last 10 years, the fund type has remained a permanent feature in the investment portfolios of the majority of the LP community, with a significant number of investors around the world actively seeking venture capital opportunities from a range of stages. Preqin’s Funds in Market online service shows that as of December 2013, 188 venture capital funds have held a final close so far this year, having raised a total of $26bn in investor commitments.
North America-focused venture capital funds remain the most prominent on the fundraising landscape. One-hundred and fourteen North-America focused funds closed, amassing $19bn and accounting for three-quarters of capital raised by all venture capital funds to close since the start of 2013. European venture capital fundraising has remained low, with 27 funds raising slightly over $3bn in total, significantly less than the 53 funds that secured almost $6bn in 2011.
With a total of $13bn raised for investment focused on the information technology sector so far this year, it is evident that the industry remains the most prevalent primary industry focus for venture capital funds. This year’s figures reveal that, for the first time, more capital has been raised for information technology-specific funds than diversified funds. The largest fund to have closed so far in 2013, InSight Venture Partners VIII, raised a total of $2.57bn for investments into software and technology industries.
Currently, the venture capital fundraising market features 489 funds on the road targeting an aggregate $46bn, representing a record number of venture capital funds in market and the largest ever corresponding aggregate capital size.