A recent report by CBInsights reveals the shifting landscape of corporate venture capital (CVC), with a strong emphasis on artificial intelligence (AI), early-stage deals, and a decline in investment activity in Asia.
CBInsights revealed in the research report that during 2024, global CVC-backed funding rebounded by 20% year-over-year (YoY) to $65.9 billion, driven primarily by increased investment activity in the US.
However, the CBInsights report also noted that the deal count continued to decline, reaching its lowest level since 2018, with 3,434 deals recorded in 2024.
Regional Breakdown:
The US was the main driver of CVC-backed funding growth, increasing 39% YoY to $42.8 billion.
Europe also saw a rise in CVC-backed funding, growing 18% to $12.3 billion.
In contrast, Asia experienced a significant decline, with CVC-backed funding dropping 34% YoY to $7 billion, the lowest level since 2016.
AI startups dominated CVC-backed funding and deals in 2024, capturing 37% of funding and 21% of deals, both record highs.
The largest CVC-backed rounds in Q4 2024 primarily went to AI companies, including Perplexity, Poolside, and Lightmatter.
The CBInsights report added that early-stage rounds comprised 65% of 2024 CVC-backed deals, tied for the highest share in over a decade.
Biotech startups accounted for half of the top 20 early-stage deals.
Among deals with CVC participation, the annual average deal size hit $27.3 million in 2024, tied for the second-highest ever.
The CBInsights report pointed out that this suggests that CVCs are becoming increasingly selective and aggressive when investing.
China led the decline in CVC-backed funding in Asia, with no quarter in 2024 exceeding $0.5 billion in funding.
According to the report from CBInsights, CVCs remain wary of investing in China’s private sector.
In contrast to the decline in Asia, Japan-based CVC deal volume remains near peak levels, suggesting a more resilient CVC culture when compared to other nations.
The research report also mentioned that Mitsubishi UFJ Capital and SMBC Venture Capital, both based in Japan, were among the most active CVCs in Q4 2024.
The CBInsights report further revealed that the trend of AI dominance in CVC investment activity is expected to continue into 2025, as emerging AI markets mature further.
CBInsights concluded in its latest report that key areas of focus will include AI agents and copilots for enterprise and industrial use cases, AI solutions for e-commerce, finance, and defense, and the computing hardware necessary to power these technologies.