Venture Funding Increases for Second Straight Quarter, Reaching $65.7B, Up 8% QoQ – Report

CBInsights has released the State of Venture Q2’24 Report

CB Insights notes that you may review the latest investment data to make more well-informed decisions.

According to the update from CBInsights, AI startups steal the show, “grabbing nearly a third of all funding, while the rest of the venture ecosystem remains tepid in Q2’24.”

Even as investors remain highly selective with their dealmaking, they’re “reserving their dry powder for fewer, bigger deals in areas with strong growth potential like AI.”

Based on their deep dive below, here is the quick summary on the state of venture:

  • Venture funding climbs for a second straight quarter, reaching $65.7B, up 8% quarter-over-quarter (QoQ). However, while funding gained momentum, deals slid for the ninth quarter in a row to 6,230. Global deal volume is now less than half of what it was at its peak in Q1’22.
  • At $14.4M, the average deal size is up 17% this year so far vs. 2023. Even in a more cautious investing environment, the deals that do happen have ballooned in size as investors put more behind select startups.
  • AI startups are dominating global funding, capturing 28% in Q2’24. This is the highest quarterly share on record. AI startups drew $18.3B in Q2’24 — up 32% QoQ — driven by mammoth $1B+ deals to Elon Musk’s xAI as well as Scale, CoreWeave, and others.
  • The US is attracting a greater portion of exit activity, with exit share rising 4 percentage points QoQ to 39%. This represents its highest share in 2 years. Top US-based exits in Q2’24 included IPOs from Tempus and Rubrik — both valued at over $5B — as well as Hyundai’s acquisition of Motional priced at $4.1B.
  • SOSV is the most active venture investor, backing 35 companies in Q2’24. It’s followed by Andreessen Horowitz (33 companies), General Catalyst (31 companies), and Lightspeed Venture Partners (28).
  • Fintech funding rebounds 19% QoQ to hit $8.9B — a 5-quarter high — led by $600M+ rounds to Stripe and AlphaSense. But it was a different story for the retail tech and digital health sectors: retail tech funding was stagnant from Q1 to Q2, while digital health funding slipped by 26%.
  • Quarterly funding to startups in Asia falls below $10B for the first time since 2014. The drop was especially severe in China, where some international investors have pulled back or retreated altogether amid rising geopolitical tensions. Meanwhile, the US and Europe — the two largest regions for venture investment — each saw funding grow by double-digit percentages in Q2’24.

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