In the second quarter of 2024, global venture funding surged by eight percent, reaching $65.7 billion despite a continued decline in the number of deals. This marks the ninth consecutive quarter with decreasing deal volumes, now standing at only 6,230 deals, less than half of the peak recorded in the first quarter of 2022.
The latest State of Venture report from CB Insights highlights a significant increase in the average deal size, up 17 percent to $14.4 million compared to the previous year. This rise indicates a trend where investors are focusing their funds on fewer but larger investments, showing confidence even in a cautious investment climate.
AI startups have emerged as the leaders in venture capital funding, attracting 28 percent of all VC investments in Q2 2024, totaling $18.3 billion, a 32 percent increase compared to the previous quarter. Notable investments include contributions to companies like xAI, Scale, and CoreWeave, further solidifying AI’s dominance in the startup landscape.
During the second quarter, the US and Europe each accounted for 39 percent of global exits, including mergers, acquisitions, and IPOs. The US saw a four-percentage point increase in exits compared to the previous quarter, with noteworthy events such as IPOs from Tempus and Rubrik valued at over $5 billion, as well as Hyundai’s acquisition of Motional for $4.1 billion.
Conversely, venture funding in Asia experienced a substantial decline in Q2 2024, dropping by 13 percent to $9.7 billion, falling below $10 billion for the first time in a decade. China, in particular, saw a significant decrease in funding by more than half, while countries like India, Singapore, and Japan observed funding increases.
As we navigate through 2024, AI startups continue to dominate the venture capital scene while the rest of the ecosystem faces challenges. CB Insights’ Q2’24 report provides detailed insights on how different sectors are faring, top investors, significant deals, and emerging trends expected in the latter half of the year.
