Venture investors are sitting atop more investable capital than ever before
You might think given the chatter in the startup world that venture capitalists are short on funds — after all, we’re hearing about young tech companies finding themselves marooned between stages, hitting up investors with smaller capital pools than prior backers and turning to equity crowdfunding to keep their cash balances healthy.
And yet new data from PitchBook and the National Venture Capital Association indicate that while the pace of U.S. venture capital investment is slowing — more here on the global perspective — American venture capitalists are sitting atop more investable capital (dry powder) than ever before.
Even more, the pace at which venture investors are accreting funds is elevated compared to historical norms, meaning that private-market investors are in aggregate not struggling to raise, even if their portfolio companies may find themselves in a very different situation.
Further proving that venture investors have more dry powder than ever before, this week started with a flurry of venture capital fund close announcements across sectors and stages. It tells that LPs are staying active amid this dissonant moment in tech, and despite some struggles ahead for emerging fund managers, that’s news.
Our team got a good list going:
- B Capital closed on $250 million in capital commitments for its Ascent Fund II, its first dedicated early-stage fund that will invest in pre-seed through Series A companies globally, but with an emphasis on the U.S. and Asia.
- Cathay Innovation and AfricInvest announced a final close of €110 million on their Cathay AfricInvest Innovation Fund, a Pan-African fund they began working on together in 2019.
- AM Ventures closed on a $100 million fund that will target early-stage companies focused on industrial and commercial 3D printing applications.
- Tribe Capital, which has $1.5 billion in assets under management, grabbed $25 million from investors to launch a cryptocurrency incubator program.
- Crypto asset manager Valkyrie is planning to raise between $25 million and $30 million for a venture capital fund under its new arm, Valkyrie Ventures, to invest in “the infrastructure layer” between Web 2.0 and web3. The company, better known for launching one of the only U.S. SEC-approved bitcoin futures ETFs, is moving into a new asset class — venture capital.
- Fundrise, a company that allows anyone to invest in real estate with a minimum investment of just $10, is raising a new $1 billion growth equity fund to invest in late-stage tech startups. The new fund will be evergreen, meaning it will have an indefinite life, a structure similar to that of Homebrew and some of SoftBank’s funds.
- Finally, and this isn’t a new fund but a new program to get more fund managers out there, VC Include announced its 2022 fellowship focused on BIPOC first-time fund managers. Aspiring investors who are based in the United States and want to raise between $10 million and $100 million for their VC or PE fund are invited to apply.
Here are plenty of other tasty morsels from earlier this week and last week:
- The United Arab Emirates secured $800 million in capital commitments for a new fund that will launch into space initiatives.
- Battery Ventures is charging up its capital deployment after reeling in $3.8 billion in commitments across three new funds that will invest in all stages of startups in areas including business software, fintech, healthcare and data. Battery Ventures XIV and a companion fund take $3.3 billion of it, and the $530 million Battery Ventures Select Fund II, is a vehicle that was created to make additional investments primarily in portfolio companies of the firm’s other funds.
- Now over to Iter Investments where it closed its debut fund with over $20 million in committed capital to deploy capital into the emerging psychedelic market. As our colleague Anna Heim reported in May, psychedelics is an area that had some early hype and also some early fails, but some investors are digging their heels into what they think is still pretty young. Iter, founded by Dustin Robinson, has a portfolio of 16 companies across the market.
- Meanwhile, Collaborative Fund announced its new Collab SOS fund with $200 million in commitments to invest in Series A and B companies operating in the sustainable economy across materials, ingredients, energy and supply chains. Limited partners came from some of the largest purchasers of materials, experts in agriculture and industry leaders, according to the firm.
- London-based auction house Christie’s said this week it will create its own venture capital arm called Christie’s Ventures aimed at investing seed capital into startup technology that would help collectors buy and sell more art, either digitally or another method.
- Lightspeed raised $500 million for its new India and Southeast Asia fund, TC’s Manish Singh reports, adding to a more than $7 billion tranche aggregated across new funds. As Singh points out, the firm has a team of nine partners in India and Southeast Asia and is nearly doubling the size of its fund’s assets.