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Laxman Pai, Opalesque Asia:

Raising capital in Q1 2020 was a challenge for some venture capital firms with the COVID-19 pandemic roiling economies across the globe.

Just 83 US-based venture capital funds held a final close, down from 109 in Q1 2019, said a joint study by Preqin and First Republic on US venture capital.

The small number of fund closures reflects the difficulties many market participants faced in keeping business operations steady amid social distancing measures. That said, those funds that did close raised a substantial amount of capital, at $27bn, which is over half of the total capital raised in 2019 ($50bn).

Mega funds drive fundraising market

Mega funds drove the success of US-based venture capital fundraising in Q1 2020. Seven mega funds (vehicles sized at $1bn or more) closed in the quarter, compared to six mega-funds in the whole of 2019.

These were led by Tiger Global Private Investment Partners XII ($3.75bn) and New Enterprise Associates 17 ($3.6bn).

Mega funds represented 9% of the total number of funds closed in Q1, which is the largest quarterly proportion in the past 10 years. The trend of capital consolidation in the fundraising market continues.

The seven mega-funds that closed in Q1 invest across a range of sectors, including information technology and healthcare.

B Capital Group raised $750mn for B Capital Fund II, almost twice the size of its predecessor fund B Capital Fund ($360mn), and $150mn over......................

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