VC Dealmaking Slides in Q1 2024, Fintech Sector Takes A Hit with Funding Falling 16% QoQ – Report

VC dealmaking slides to a 7-year low, while several blockbuster deals “drive a modest rebound in funding,” according to an extensive update from CBInsights.

According to the latest CBInsights report, Q1’24 was “a mixed bag for the venture market.”

The CBInsights report reveals that equity deal volume “declined for an eighth straight quarter, but a handful of billion-dollar rounds — particularly in generative AI — helped drive funding up 11% quarter-over-quarter (QoQ).”

Based on CBInsights’ deep dive and analysis, here are the main takeaways on the state of venture:

  • Venture funding climbs 11% QoQ to $58.4B. Q1 funding was buoyed by several massive deals, including Amazon’s $2.75B investment in generative AI company Anthropic. Despite the quarterly gain, funding remains down 21% vs. Q1’23 and 62% vs. Q1’22.
  • Deals slide for an eighth straight quarter, down 7% to 6,238. Asia and Europe saw 8% and 9% declines, respectively, in VC deal activity. The US, on the other hand, bucked the global trend, seeing deals tick up 1% QoQ.
  • Mega-rounds (deals worth $100M+) are a bright spot, growing 30% QoQ to 105. These large deals represented 45% of total funding in the quarter, up 11 percentage points from the previous quarter. Corporate investors like Amazon, Disney, and Alibaba were behind some of the largest deals.

As stated in the research report from CBInsights, the quarter “sees 19 new unicorns spread across the US, Asia, and Europe, down slightly from 23 the previous quarter.”

The report also mentioned that Europe’s 5 new unicorns “represented a 5-quarter high for the continent. The highest-valued unicorn birth in Q1’24 went to Figure, a humanoid robotics developer valued at $2.7B.”

The report pointed out that the fintech sector “takes a hit, with funding falling 16% QoQ, while digital health and retail tech see gains. Digital health funding surged by nearly 50% in Q1’24, driven by multiple biotech mega-rounds.”

Silicon Valley sees $4 out of “every $10 in US funding.”

Silicon Valley startups “drew $14.4B in Q1’24 — more than 3x the next US metro (New York with $4.4B) — to capture 42% of the country’s funding.”

The CBInsights report concluded that “while that figure was driven up in Q1’24 by Anthropic’s $3.5B in cumulative funding, it’s not an anomaly: Silicon Valley has seen over a third of all US funding since 2020.”

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