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Laxman Pai, Opalesque Asia: As of August 2021, 3,525 venture capital (VC) funds are in the market, a near 40% increase since January of this year, said a study.
According to the Q3 2021 Venture Capital Quarterly Report published by Preqin, although Q3 fundraising data paled in comparison to earlier quarters of the year, aggregate capital raised ($29bn) still surpassed the $27bn raised in Q3 2019, before the pandemic.
Fundraising momentum remains strong across 2021 overall, with near-record capital raised in the first half of the year, it said.
"The bright spot for the asset class is North America, where 199 funds closed with $17bn, indicating that institutional investors increasingly target early-stage and venture debt vehicles, while also showing a growing interest in emerging markets," said the report.
The aggregate value of VC deals also hit a record high in Q3 2021 at $172bn. Despite record deal-making, the number and aggregate value of exits declined in Q3, in part due to fewer IPOs for venture-backed companies.
Yet, venture capital performance continues to improve; even the lowest quartile of VC funds surpassed 10% IRRs, while top-quartile funds reached 42% net IRR, exceeding private equity's top-quartile fund IRR of 34%.
Meanwhile, VC with $1,683bn in AUM, has established itself as a mature asset class and legitimate source of returns in institutional portfolios.
"Institutional investors also indicated a greater preference for early-stag...................... To view our full article Click here
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