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Global venture capital funds raise $54bn in Q1 2022, an 11.1% rise compared to Q4 2021

Thursday, April 14, 2022

Laxman Pai, Opalesque Asia:

Venture capital fundraising continued at a strong pace in Q1 2022. $54bn was raised by global venture capital funds in the quarter, an 11.1% rise on Q4 2021, but an 8.8% decline in the same period last year, said a study.

The year-on-year decline is not a bad result given the strength of activity in late 2020 and going into 2021, according to Preqin's Q1 2022 Venture Capital Report.

Despite a strong fundraising record, VC investors' concerns over asset valuations, competition for assets, and the Russia-Ukraine conflict remain relevant.

In Q1 2022, just 202 funds were raised-the lowest number of funds raised since 2017-implying that investors are putting their trust and capital in larger and more experienced VC managers.

Given the global average venture capital fund size in Q1 2022 jumped from $126.9mn to $267.3mn quarter-on-quarter, investors are clearly demonstrating a preference for larger funds.

According to Preqin, this trend is especially obvious in North America and Europe, which saw a 190% and 48% increase in average fund size during Q1 2022. Globally, there has also been a drop in planned commitment below $50mn, from 51% in Q1 2021 to 49% in Q1 2022.

Meanwhile, the venture capital assets under management (AUM) have experienced double-digit annual growth in the 20-30%+ range over the past four years and now stand at a record high of $2tn.

As the venture capital market matures, 14% of institutional investor......................

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