VC Funds Raised $18.17B In 2011, The Most Since 2008

Venture Capital funds last year raised the most since 2008, but it’s unclear whether the industry has actually rebounded.

In 2011, 169 funds collected about $18.17 billion. The total is up nearly 32% from 2010 when the same number of funds, 169, raised roughly $13.8 billion, according to data from Thomson Reuters and the National Venture Capital Association. Thomson Reuters is the publisher of peHUB.

The $18.17 billion is the most collected by VC funds since 2008, when 212 funds raised $25.9 billion, Thomson Reuters and the NVCA say.

But the NVCA isn’t calling this fundraising surge a rebound. “Dollar-wise [2011] was better,” says Emily Mendell, an NVCA spokeswoman. “We’re cautious because there are still lots of firms not raising money.”

In 2011, VC firms invested an estimated $27 billion to $30 billion. But the industry only raised just over $18 billion, Mendell says. “This is the fourth year that VCs have invested more than they’ve raised,” she says. ”It’s not bad but it’s telling you that the industry is getting smaller.”

Fourth quarter saw a similar fundraising trend. Thirty-eight funds in the quarter raised $5.6 billion, up 51% from the $3.7 billion collected by 48 funds for the same time period in 2010. The $5.6 billion is more than double the $2.1 billion raised in third quarter 2011.

While quarterly fundraising total is high, the number of funds raising money declined. In fact, the quarter’s 38 funds is the lowest number since the third quarter 2009, when 36 funds raised $2.3 billion, the NVCA and Thomson Reuters say. “We’d like to see more funds out there successfully raising money,” Mendell says.

Still, there are some positive notes. The biggest fund of the fourth quarter came from Khosla Ventures, which raised $1.05 billion with its newest fund.

Bessemer Venture Partners III, which collected $1.6 billion in 2011, was the largest fund of the year. Sequoia Capital, which pulled in $1.3 billion, placed second, while JP Morgan, which raked in $1.2 billion for its digital growth fund, came in third.

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