Venture capital funds in the United States collected more dry powder in the first three quarters of this year than in all of 2021, but it’s not evenly distributed: Big funds continue to increase, while fundraising becomes more difficult for most other players. And third-quarter data shows that where a company is based appears to be playing an increasingly important role.
In the third quarter of 2022, US venture firms raised $150.9 billion across 593 funds, according to data compiled by PitchBook. While that represents a boost from the $147.2 billion raised in 2021, it marks a stunning drop from the 1,139 funds that closed last year.
Much of those dollars went to old or established firms that have the clout to raise megafunds, although some firms attracted dollars by building buzz. Consequently, long-term companies have not been as keen to back firms outside established venture hubs this year, marking an unfortunate reversal of the COVID-induced trend of more venture money making its way to emerging ecosystems.