Canaan Partners is ringing in the new year with some good news. The 25-year-old Silicon Valley venture firm just announced it's raised $600 million for its Canaan IX fund, bringing its total capital under managemed to $3.5 billion.
Canaan's fundraising reflects the appetite from limited partners for early-stage funds. The total amount of venture capital funds raised in 2011 was $16.2 billion across 135 funds, according to Dow Jones LP Source. This is up 5% from last year and is due to strong demand for venture capital firms focused on early-stage investments, according to the report. The report also says there was a 12% decline in the number of firms that won commitments last year, which could indicate that Canaan was among the lucky ones to attract funds.
About two-thirds of the fund will be focused on technology investments in digital media, consumer Internet, enterprise, mobile and communications in the U.S., India and Israel. A third of the fund will be designated to healthcare investments in biopharmaceutical, medical devices and healthcare infrastructure.
Some of the recent tech investments made in 2011 include, bets in Blip.tv, Lending Club and Kabam.
Some of Canaan's investments include Advanced BioHealing, which was acquired by Shire for $750 million last year. Active Network (NYSE: ACTV), which raised $165M in a successful IPO in 2011; Associated Content, the leading content syndication platform, acquired by Yahoo! in 2010; BiPar Sciences, pioneer of a new class of oncology drugs, acquired by Sanofi for $500M in 2009; and Calixa Therapeutics, developer of novel antibiotics, acquired by Cubist for $400M in 2009. Most recently, SandForce, the leading provider of flash storage and SSD processors for enterprise, was acquired by LSI for $370M in January 2012.