Summary List Placement
US venture firms filled their coffers at record levels in 2020, but new funds fell behind in raising cash, according to the National Venture Capital Association.
Last year, venture funds closed $74.5 billion in funding, a 30% increase from 2019, the NVCA said in a tweet on Monday. The tweet referenced data from the association’s 2021 yearbook, published in partnership with PitchBook.
The record sum went to a smaller number of funds than in the previous year, however. In 2020, 339 funds raised capital, versus 527 in 2019.
Tiger Global Management, New Enterprise Associates, Andreessen Horowitz, and General Catalyst were among the biggest beneficiaries of 2020’s record VC haul. Each of those firms raised at least one fund of $1 billion or more last year. Of the 10 biggest funds that closed in 2020, two belonged to Andreessen, while another two went to Lightspeed Venture Partners.
The average size for a US VC fund has nearly doubled, according to the NVCA. In 2019, it was $131 million, and in 2020, it grew to $229 million.
But not all venture firms have benefited equally.
The number of first-time VC funds dropped last year, and those funds also raised less money than before. In 2020, 54 first-time funds closed $4.1 billion, whereas 96 first-time funds raised $6.1 billion in 2019. The pandemic likely accounted for the declining dollars to first-time VC funds, the NVCA said.
While early-stage funding has heated up over the past few months, it may well cool off in the future as a result, according to the association.”The decrease in first-time funds over the past two years may have a lagging impact on the fortunes of seed and early-stage companies,” the NVCA wrote in its report.