CBInsights has released their State of CVC Q3’24 Report.
According to the detailed research report from the team at CBInsights, CVCs or corporate venture capital funding show “heightened” interest in early-stage rounds, even as CVC deal-making has reportedly fallen to its “lowest level since 2018.”
The research study from CBInsights revealed that during Q3’24, global CVC-backed funding “fell 5% quarter-over-quarter (QoQ) to $15.7B — alongside a 10% decline in deals” — as international investors attempted to navigate persistent “macroeconomic headwinds” resulting from inflation pressures and elevated interest rates to China’s “economic challenges.”
Despite these considerable declines, the research report from CBInsights noted that “$100M+ mega-rounds comprised 51% of total CVC-backed funding in Q3’24, a notable increase from a quarterly average of 37% in 2023.”
Meanwhile, the research study from CBInsights also mentioned that “two-thirds of CVC deals this year have gone to early-stage companies, highlighting a strategic shift toward more emerging opportunities, especially in AI.”
Based on their deep dive in the extensive report, here are the key takeaways on the state of CVC from CBInsights:
- Global CVC-backed funding drops 5% to $15.7B in Q3’24. Nevertheless, that figure is still the second-highest quarterly level since the beginning of 2023. Meanwhile, a 10% QoQ decline to 773 deals — the lowest total since 2018 — suggests that CVCs are increasingly selective, similar to the wider venture market.
- The average CVC-backed deal size has increased 31% so far this year to $27.1M, highlighting investors’ willingness to take risks when they find the right opportunity. However, the median deal size remains the same as last year at $8M, signaling that investors are only more aggressive regarding the largest deals.
- Funding to CVC-backed mega-rounds (deals worth $100M+) represents 51% of total funding in Q3’24. This percentage — roughly in line with the first 2 quarters of 2024 — is up significantly from an average of 37% in 2023, further suggesting that investors are currently willing to make large bets when they decide to invest.
- Early-stage rounds represent 66% of total CVC deal share this year, the highest level in over a decade. CVCs are increasingly focused on early-stage startups, likely driven by the record levels of AI funding and the fact that, across investor types, 72% of deals to AI companies this year are early-stage.
- CVC-backed funding in the US ticks up to $10.5B. Among major global regions, the US continued to lead in CVC-backed funding in Q3’24, followed by Europe at $2.6B and Asia at $1.3B. Within the US, defense tech provider Anduril raised the largest CVC-backed deal with its $1.5B Series F round (CVC investors include Franklin Venture Partners), followed by AI chip developer Groq with its $640M Series D round (backed by Samsung Catalyst).
