VCs Invest More Money — But In Fewer Ventures

The venture capital industry logged a slowdown last year or, depending on how you look at it, may have hit a speed bump.

As reported by Bloomberg on Wednesday (Jan. 13), firms operating within the venture capital industry closed fewer funds (meaning they raised enough money to stop actively seeking new investors) and raised less money in aggregate than had been seen in previous periods.

The data comes from the National Venture Capital Association, a trade organization. The squeeze may be in for the industry as a whole, the newswire reported, as there is less capital on the books to be deployed. And with less capital on hand, would-be investments may see tighter scrutiny than had been seen in other periods. The total amount of funding in venture capital stood at $28.2 billion in 2015, down from $31.1 billion in 2014. There were 235 venture capital funds that closed last year, down 13 percent from 2014.

Turning specifically to private tech financings done by venture capital vehicles, Bloomberg noted that the venture capitalists invested more money into firms, but the number of actual investments declined, which would imply that deal sizes got bigger. Among the bigger investments recorded in 2015: Tiger Global closed a venture fund toward the end of the year that raised $2.5 billion.

[bctt tweet=”The number of actual investments declined, which would imply that deal sizes got bigger.”]

Among the VC firms themselves, the number of firms raising their very first investments were up at about a third of all funds, on par with previous years, a threshold confirmed by data gathered by Bloomberg. That would mean that so-called “established” firms were again the majority of investments.