Funding is the lifeline of business, turning ideas into reality.
As Steve Jobs said, "A great idea is worthless without the capital to execute it."
This article examines global venture capital (VC) trends, spotlighting the top-funded sectors, fastest-growing regions, and key drivers shaping the future of innovation.
This article combines open-access resources and proprietary data to present accurate, up-to-date statistics and relevant developments in the startup economy.
Our methodology involves:
While we strive for accuracy, trends in the startup space are shifting rapidly.
These statistics reflect current patterns and should not be considered permanent facts.
Venture capital is a form of private equity financing, where the investment focus is startups, early-stage and emerging companies.
The financing is provided by venture capital firms or funds, who seek to invest in companies within these categories that they believe have high growth potential due to something creative about their business model.
This brings benefits for the startup founders and their employees, the venture capital investors, and often society at large, who gain access to a new product or service that enhances their quality of life.
Because of the inseparable nature of funding from the life cycle of a startup, founders go through several rounds of fundraising, from:
Certain big names that dominate the VC space include Sequoia Capital, Andreessen Horowitz, and Khosla Ventures.
On the global landscape, venture capital (VC) experienced a remarkable decline in investment in 2023 - judging by the 2020/21 hype years - and has continued to plunge deeper.
According to Crunchbase News, the global venture funding in Q3 2024 stood at $66.5 billion, a 16% decline from Q2 2024 and 15% YoY from the $78 billion invested in Q3 2023 making it the 9th quarter into the current startup funding decline, and the second time since 2017 that funding is plunging below the $70 billion mark. (CrunchBase News)
Additionally, 2024 also presented the opportunity-rich venture capital environment with economic uncertainties making investors more cautious in their investment decisions - a selectiveness that has popularized some sectors.
At the end of Q3, the number of early-stage unicorns — companies with valuations over $1 billion — has already exceeded the number seen during all of 2023. (KPMG)
This leap - despite the current uncertain macroeconomic and geopolitical environment - has been propelled almost entirely by activity in the AI space, with a number of early-stage AI companies obtaining unicorn valuations on their first major raises.
While the number of new unicorns remained well below the levels seen during the earlier years of 2021 and 2022, investment trajectory highlights a focus on the AI sector. (KPMG)
In October, CB Insights reported that 1 in 3 (31%) of all venture funding in Q3 of 2024, went to AI startups.
VC investors are pouring dollars into the space even as they take a far more cautious approach to their other investments.
As the venture capital market continues to develop, staying ahead means more than just following trends; it involves anticipating them.
As it stands, recognizing and understanding emerging sectors and technologies early is key to capitalizing on these opportunities effectively.
Hence, a reliable and comprehensive source of information becomes an invaluable tool that will enable VCs to navigate this complex terrain with confidence and strategic foresight.
A look into the sectors show us where VC dollars are flowing to and which region is leading in supporting startups and small businesses:
Globally, AI continued to attract the largest share of VC investment, accounting for the largest deals in the Americas, Asia, and Europe during the third quarter of 2024.
The global artificial intelligence market size was estimated at $196.63 billion in 2023 and is projected to grow at a CAGR of 36.6% from 2024 to 2030. (Grandview Research)
With investment in AI start-ups reaching $24 billion in the quarter that ran from April to June. (The World Economic Forum)
According to Crunchbase data analyzed by EY, AI deals accounted for 37% of the $38 billion raised by VC-backed companies in Q3 of 2024, with four of the 10 largest deals involving AI-related companies. (Statista)
On the one hand, investors are interested in companies that develop basic AI technologies and on the other hand, companies that use AI to improve business models.
The most remarkable AI investments were made in start-ups that develop large language models and in companies that want to use artificial intelligence for specific industries or in certain functions such as healthcare, biotechnology, and supply chain logistics.
So far, OpenAI stands as the startup with the highest VC-backed funding in 2024, with a mega deal of $6.6 billion in a funding round that values OpenAI at $157 billion post-money. (Techcrunch)
This is closely followed by Elon Musk’s xAI which raised $6 billion in a series B funding round in May, and other startups: Waymo Alphabet Inc ($5.6 billion) Safe Superintelligence ($1 billion), Scale AI ($1billion) raised more than $1 billion in a fundraising round.
VC investors globally also showed interest in startups with offerings tangential to the AI space, including companies looking to reduce the energy requirements associated with many AI solutions. (KPMG)
Post-pandemic, digital transformation trends have been on the rise—increasing investments in remote work technologies and telehealth.
According to a survey by EY, 70% of U.S. patients said a telephone consultation worked just as well as communicating their symptoms to the physician in person, while virtual care (use of telephone and video for consultation) exploded from 20% to over 80%.
With the accelerated adoption of telehealth and digital health solutions, we will continue to see massive transformation and investment in the personalized health and wellness space.
The quarter-trillion-dollar industry has also seen a rise in mega-rounds (investments exceeding $100 million and up to the billions) and unicorn startups.
So far in 2024, biotech and health companies have pulled in around $5.6 billion across 110 Series A rounds, accounting for 53% of all funding at the Series A stage, which is a closely watched barometer for the startup ecosystem. (Crunchbase News)
Of the 10 largest Series A rounds this year, six are biotechs, including Xaira Therapeutics’ massive $1 billion Series A round in April led by lead investors Arch Venture Partners and Foresite Capital. (ThePharma Letter)
The second-largest Series A also went to a biotech, Mirador Therapeutics, which is focused on precision medicine for chronic inflammation and fibrotic disease.
The San Diego company landed $400 million in a March round, also led by Arch. (Crunchbase News)
Generally, 2024 started out a challenging year for the fintech market globally, driven by ongoing concerns related to geopolitical uncertainty like the elections in France, the U.S., and the U.K. and economic instability.
The result is that total global investment declined from $62.3 billion to $51.9 billion between H2 of 2023 and H1 of 2024—the lowest six months of fintech investment since H1 2020 according to a report by KPMG.
However, in the second quarter of 2024, financial services companies raised $9.7 billion, up a bit year over year and up 17% quarter over quarter from the $8.3 billion invested in the sector in the same quarter in 2023. (Crunchbase News)
According to KPMG’s Pulse of Fintech report, deals above $1 billion occurred only five times in the fintech space during the first half of 2024—including Worldpay's $12.5 billion buyout.
While fintech investment remained suppressed, deal volume offered a hint of optimism for the fintech market with payments attracting the largest share of fintech funding globally, up to $21.4 billion in H1 of 2024.
Regtech, however, was the only major fintech subsector to see investment increase in the first half of 2024—with the $5.3 billion in investment already surpassing 2023’s total. (Mondaq)
In the second quarter, cyber startups saw a robust $4.4 billion invested in 153 deals — the lowest deal count in years, though the dollar figure represents a 63% increase from Q1, which saw $2.7 billion roll to startups in 173 deals. (Crunchbase News)
Cumulatively, the first half of the year saw $7.1 billion in venture dollars go to cyber startups in 327 deals — a 51% jump from the $4.7 billion invested in H1 2023 in 101 fewer deals. (Crunchbase News)
The biggest funding in this more than $172.24 billion sector in Q2 goes to cloud security startup Wiz which raised $1 billion in May, followed by 10 other rounds that hit the $100 million or more mark. (Crunchbase News)
After a sluggish 2023, crypto venture capital is slowly bouncing back, as of July 2024, over $2.2 billion has been raised across 24 funds, according to data from PitchBook, putting the market on track to surpass last year’s $2.6 billion total. (Forbes)
Startups related to Web3 — defined as those in the crypto and blockchain sectors — raised just less than $1.9 billion in 346 deals in Q1, which reflects a 58% increase from last year’s Q4, when startups in the sector raised nearly $1.2 billion in 263 deals. (Crunchbase News)
However, this year’s Q1 venture dollar number still is a 17% decrease from the same quarter in 2023, when startups raised $2.3 billion in an eye-catching 670 deals. (Crunchbase News)
The price of Bitcoin is up nearly 60% in 2024, and Ether is nearly 65% increase, the approval of U.S. exchange-traded funds (ETFs) that hold Bitcoin from nearly a dozen asset managers, and the Bitcoin halving event. (Investopedia)
New York-based Monad Labs locked up the biggest Web3 funding round of the year thus far, collecting a $225 million funding round led by Paradigm. (The Block)
Followed by London-based Exohood Labs, which is undertaking an AI project that uses quantum computing and blockchain, raised a massive $112 million seed round that valued it at $1.4 billion. (Crunchbase)
In the Global Innovation Index (GII), VC funding has become a key metric for measuring the vibrancy of innovative start-ups as it reflects both investor confidence and the strength of entrepreneurial enterprise in a region.
Number of Deals and Value
In the first half of 2024, North America leads global VC deals with 37% while Latin America and Africa combined account for only 3% according to the World Intellectual Property Organization.
Cumulatively, the US accounted for a 28.9% share of the total number of VC deals announced globally, with 209 worth more than or equal to $100 million during Q1-Q3 2024 while its share of the corresponding funding value stood much higher at 50.1%. (Global Data)
$1 Billion+ Deals
Globally, about 13 companies have attracted more than $1 billion VC deals in 24, with Q2 being the second largest quarter of $1 billion+ mega-deals on record.
The Americas accounted for the largest share of these deals, including $6.6 billion by Open AI, $6 billion raised by xAI, $1.5 billion by Anduril Industries, $1.1 billion raised by CoreWeave and $1 billion raised by Scale AI, Wiz, Safe Superintelligence and Xaira Therapeutics — all within the US. (Global Data)
Gaming
In the Q3 of 2024, North America was the leading region in terms of gaming venture capital (VC) deal funding with $306 million across 34 deals, while Asia followed with $132 million across 32 deals, and the EMEA regions accounted for $79 million across 26 deals during the quarter. (Statista)
In the first 6 months of 2024, Asia-Pacific accounted for 35% of global VC funding. (WIPO)
The region attracted the second largest share of VC funding among the key regions, driven by mega deals like the $788 million raise by Mynt, followed by a $688 million raise by Baichuan AI and a $415 million raise by ICLeague — all China-based.
In addition to the $362 million raise by Singapore-based Silicon Box, and a $360 million raise by India-based Zepto. (KPMG)
$1 Billion+ Deals
The Asia-Pacific region also saw at least four (4) $1 billion+ raises by different companies like the 8 billion yuan ($1.1 billion) in February by IM Motors, $1 billion by Beijing-based Moonshot AI (Yuezhi Anmian), $1.96 billion raise by Singapore-based Lazada and a $1 billion raise by India-based Flipkart.
Number of Deals and Value
Meanwhile, total venture dollars to Asia-based startups fell to $13.2 billion representing a 13% decline from Q2 and a massive 44% drop from last year when that total hit $23.8 billion according to Crunchbase data.
Deal flow also continued to plunge downwards, with only 1,509 deals announced in Q3, an 8% decrease from Q2 and a 23% drop compared to last year. (Crunchbase News)
In the first half of 2024, the United Kingdom (UK) was the leading country in terms of venture capital (VC) investments in Europe with $9.4 billion ahead of Germany and France, with $4.3 billion each. (Statista)
According to the World Intellectual Property Organization, Europe accounted for 25% of VC funding globally as of Q3, 2024.
The region also benefits from support from the European Commission, which has committed to investing €1 billion per year in AI and plans to gradually increase public and private investment to a total of €20 billion annually over this decade. (Pitchbook)
AI is driving the European long-tail startup ecosystem in a big way with more than 1,700 funding rounds for AI startups in the region so far in 2024. (Techcrunch)
$1 Billion+ Deals
Europe saw UK-based self-driving startup Wayve raise $1 billion in Q2 of 2024, also the Paris-based generative AI startup Mistral, raised more than $1 billion, first in a tranche of $431 million and then a second round of $650 million. (Techcrunch)
Gaming
According to data from Pitchbook, France-based gaming company Voodoo raised $386 million in Q3, 2024.
Startups in the Middle East and North Africa (MENA) raised $768 million over the first half of 2024, a year-on-year (YoY) drop of 34% largely due to the lack of mega rounds. (AL Monitor)
Although funding levels have plateaued globally, MENA reported an increase in early-stage rounds and investor participation.
Early-stage rounds of $1 million to $5 million in MENA tripled from 15% in 2020 to 45% in the first half of 2024. (AL Monitor)
Mega Deals
According to Statista data, Israel secured almost $4.3 billion in venture capital deals, followed by Saudi Arabia at roughly $1.38 billion, while sub-saharan Africa saw $254 million in VC investment.
As we have seen, the AI industry in 2024 is seeing a replica of the 1848 gold rush in California with a rapid influx of fortune seekers in the name of investors and venture capitalists.
From fintech to crypto, to clean energy, to cybersecurity, to biotech, investors’ focus moves like the shadow of the day to commit their resources to high-risk, high-potential startups and emerging technologies.
Obviously, with AI creeping into almost every sector, the boom is far from being over and the industry will continue to need funding to pay out royalties on all the content IP they’re using to train and run their models as well as hire talents.
For both founders and VC capitalists, understanding the current is important to remain relevant in the fast-changing business world.
