April 9, 2012 / 3:00 PM / in 6 years

Venture-capital fundraising falls in first quarter

WASHINGTON, April 9 (Reuters) - Venture-capital fundraising fell 35 percent to $4.9 billion in the first quarter, the National Venture Capital Association and Thomson Reuters reported, underscoring the choppy environment facing the industry even as exit opportunities for venture-capital investments seem to be improving.

Three-quarters of the total cash was raised by just five funds, continuing a trend toward $500 million-plus funds. Some 42 funds raised cash.

Relative newcomer Andreessen Horowitz raised $1.5 billion, the firm’s largest fund to date. Canaan Partners and Bain Capital Ventures each raised $600 million.

That compares with several $1 billion-plus funds a year earlier, when Bessemer Venture Partners raised $1.6 billion, Sequoia Capital raised $1.3 billion, and JP Morgan Chase’s Digital Growth fund raised $1.2 billion. The first quarter of 2011 was the strongest since the 2008 financial crisis.

The fundraising comes as more venture-backed companies are holding initial public offerings. Last week, NVCA reported that 19 venture-backed companies went public in the first quarter of 2012, raising $1.5 billion and marking the strongest first quarter since 2007. A year ago, 14 companies raised $1.4 billion.

Several prominent funds are raising cash now, including Kleiner Perkins and New Enterprise Associates.

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