Venture capital (VC) operation General Catalyst has reportedly raised almost $6 billion for technology startups.
The company, which has invested in Stripe, Snap and Mistral, could close its newest fund as soon as May, the Financial Times reported Sunday (April 28), citing sources familiar with the matter who say the funds will be invested in various sectors including defense, space, climate, FinTech and healthcare in Europe, India and the United States.
The report said the fund signals that institutional investors, endowments and foundations, known as limited partners, are still willing to give their money to high-profile firms even as a drought impacts the fundraising space.
PYMNTS has contacted General Catalyst for comment but has not yet gotten a reply.
The news comes less than two weeks after another VC group, Andreessen Horowitz, announced it had raised $7.2 billion for tech startups including those in the artificial intelligence (AI) sector.
The company said the bulk of the new funding — $3.75 billion — will help finance projects in Andreessen Horowitz’s “Growth” category, for latter-stage startups, while $1.25 billion will be set aside for firms building AI infrastructure, and $1 billion for startups creating AI applications, with a team of investors dedicated to each category.
The FT report, citing data from Pitchbook, said General Catalyst and Andreessen Horowitz’s funds will be the largest raised since the end of 2022.
At the same time, the report adds, fundraising by VCs has plummeted overall. Last year, venture firms raised $81 billion, less than half the amount taken in during the prior year. This year is also on track to be the lowest for fundraising in nearly a decade. It’s created, the FT said, a “two-tier market” that is not friendly to newer entrants.
“There have been some firms which have abandoned raising new funds,” the head of investment at a U.S. foundation that backs a number of big VC firms told the news outlet, citing companies that entered the market after 2018. “But I’d be hard-pressed to come up with a high-profile fund that’s abandoned fundraising,” he added.
Meanwhile, PYMNTS spoke earlier this month with Steve Brotman, the founder and managing partner of growth equity firm Alpha Partners, about the way AI is helping VC firms make better decisions about where to invest their resources.
“The usefulness of AI in venture capital is about augmenting human capabilities with machine intelligence to sift through the noise and identify genuine opportunities with precision,” Brotman, told PYMNTS.
“With AI, we can analyze market trends, startup performance metrics, and other critical data points at a scale and speed that’s simply unattainable for a team of human analysts alone,” he added. “This improves efficiency and fundamentally enhances the ability to make informed, strategic decisions by providing a depth of insight into potential investments that were previously unimaginable.”
