Global venture funding experienced an upward trend for the second consecutive quarter, climbing eight per cent quarter-over-quarter to $65.7billion in Q2 2024.
Despite this increase, the number of deals continued to decline, marking the ninth straight quarter of decreases with only 6,230 deals. This figure represents less than half the deal volume recorded at its peak in Q1 2022.
According to the latest State of Venture report from US-based data analytics firm CB Insights, the average deal size in 2024 has significantly increased, rising 17 per cent to $14.4million compared to the 2023 average. This surge in deal size indicates a trend where investors are concentrating their funds on fewer but larger investments, even in a cautious investment climate.
AI shines
AI startups have become the major focus of venture capital, capturing 28 per cent of all VC funding in Q2 2024 — a record high. These startups attracted $18.3billion, a 32 per cent increase QoQ. Significant deals included substantial investments in Elon Musk’s xAI and other prominent companies like Scale and CoreWeave.
In Q2 2024, the US and Europe each accounted for 39 per cent of global exits, encompassing mergers, acquisitions and initial public offerings (IPOs). This marks a four percentage point increase for the US QoQ. Notable US exits included IPOs from Tempus and Rubrik, both valued at over $5billion, and Hyundai’s acquisition of Motional for $4.1billion.
Conversely, venture funding in Asia experienced a significant decline, dropping 13 per cent QoQ to $9.7billion, falling below $10billion for the first time in a decade. China was particularly affected, with funding decreasing by more than half QoQ. In contrast, countries like India, Singapore and Japan saw increases in funding.
CB Insights stated: “As we cross the midpoint of 2024, AI startups continue to steal the show — while the rest of the venture ecosystem stumbles. Our Q2’24 report dives into how sectors have fared, top investors, the biggest deals of the quarter, and 200-plus pages of data on funding, mega-rounds, exit activity, and the trends our experts see emerging in the second half of the year.”
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