Venture capital firms in the United States raised $20.6 billion from 182 funds in 2012, new figures show, with Australian start-ups among those that benefited from the surge in investment cash.
The figures, released by Thomson Reuters and the National Venture Capital Association, show the amount raised in 2012 was a 10% increase in dollar commitments when compared to 2011.
According to NVCA president Mark Heesen, the venture capital fundraising environment has settled into a “new normal”.
“[This] is characterised by a barbell structure of larger funds which are stage and industry-agnostic on one end, and smaller, early stage industry or region-specific funds on the other,” Heesen said in a statement.
“It is on these two ends of the spectrum where capital is concentrating and successful firms are raising follow-on funds.
“Simultaneously, new funds continue to enter the asset class, almost exclusively at the smaller end of the spectrum.
“This structure, coupled with increasingly discerning limited partners, has kept the overall size of the venture industry below $25 billion each year since 2009, a size that many believe to be optimal for successful investing and maximizing returns.”
Here’s how three Australian start-ups benefited from the US VC environment in 2012.
1. Shoes of Prey
In June, Sydney start-up Shoes of Prey had plenty to crow about after raising $3 million from a mix of US and Australian investors.
Funding from the US came from the likes of leading venture capitalist Bill Tai and venture capital firm CrunchFund, led by TechCrunch founder Michael Arrington.
Shoes of Prey co-founder Michael Fox said the focus was on finding the right partners, insisting “we didn’t want to take money from anyone – we wanted investors who could add value”.
In July, ScriptRock co-founder Michael Baukes revealed to StartupSmart how his start-up raised $1.2 million in a round led by PayPal co-founder Peter Thiel.
Thiel, who was also the first external investor in Facebook, made the investment via Valar Ventures, a US-based global venture capital firm.
Valar Ventures partner James Fitzgerald said the firm is seeing an increasing number of great technology companies being started outside of the US, suggesting more Australian investments could be on the horizon.
3. Ninja Blocks
Also in July, Startmate participant Ninja Blocks raised $1 million from a group of high-profile investors in the US.
As part of the Startmate program, Ninja Blocks embarked on a three-week US tour, which involved pitches with Silicon Valley and New York investors.
It was on this tour that Ninja Blocks secured $1 million. The funding came from eight angel investors and two venture capital firms.