US venture capital fundraising reached $1.2bn in the third quarter, the lowest quarterly total since the second quarter of 1995 when $520m was raised for venture investment, according to a recent survey by California-based venture capital research firm VentureOne.
The largest venture capital fund to close in the third quarter was Outlook Ventures III at $140m.
The median pre-money valuation of venture-backed companies also fell slightly from $11m in the second quarter to $10m in the third, the lowest since 1996.
Biopharmaceuticals was the most highly valued sector, where the median rose to $22.3m from $10m in the second quarter. Shipping was also popular, with companies maintaining a median pre-money valuation of just over $12m through the year.
Despite the recent climb in the biopharmaceuticals sector, John Gabbert, VentureOne’s vice president of world wide research, warned not to place too much importance on the increase. He said: “While growing, biopharmaceuticals is still a small sector, and a sharp fluctuation from one quarter to the next may easily result from the distribution of deals among rounds.”
New venture investment was also down in the third quarter, with $3.9bn invested in 464 financing rounds, according to VentureOne’s October report, which was published in conjunction with Ernst & Young. Investment was roughly half the volume, and deal flow had declined by a third, compared with October last year, the survey said.