(Bloomberg) — Early last year, venture capital firm Felix Capital set out to raise $600 million for its next fund, touting previous investments in fitness-machine maker Peloton Interactive Inc. and food-delivery service Deliveroo. But investors want to see returns from older funds before they commit new capital, and Felix is still $150 million short of its target, according to a person with knowledge of the matter.
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It’s emblematic of broader struggles across venture capital. Fund investors, known as limited partners, want out of prior bets, proof of returns and exposure to top-tier artificial intelligence companies, even amid wild swings in the market. That’s putting pressure on smaller, sector-focused managers that hold stakes in a roster of startups with few routes to a blockbuster public offering or sale.
“The environment is harder, most limited partners have liquidity constraints, so it’s prudent for general partners to increase the investment period of their current funds, and plan more time for fundraising,” said Frederic Court, founder and investor at Felix Capital.
German venture capital firm 468 Capital began raising a $1 billion growth fund two years ago, going head-to-head with the largest European tech investors. But the firm has shelved those plans, citing a lack of interest from limited partners, and will focus on raising a smaller early-stage fund later this year, according to people with knowledge of the matter, who asked not to be identified discussing private information.
Northzone, a 30-year-old European venture firm managing $3 billion of assets, is pulling together smaller checks from a wider-than-usual pool of investors for its newest fund, the people said.
Representatives for 468 Capital and Northzone declined to comment.
The rush to AI has warped the venture capital market, with money flowing disproportionately to a handful of top-tier investors that backed the technology early.
Five companies — OpenAI, Anthropic PBC, Elon Musk’s xAI, Alphabet Inc.’s driverless car company Waymo and data center company Nscale — accounted for 78% of all venture deal value in the first quarter The initial public offering of SpaceX, which now owns xAI, accounted for about 73% of all exit value during the period
