Global venture funding in 2024 saw a modest increase over the previous year’s figures, with artificial intelligence emerging as the dominant sector, according to a recent analysis of Crunchbase data.
Overall startup funding reached approximately $314 billion in 2024, a nearly 3% rise compared to the $304 billion recorded in 2023.
While exceeding the pre-pandemic levels of 2019, the 2024 total fell short of the $346 billion and $350 billion seen in 2018 and 2020, respectively.
AI’s Breakout Year
2024 unequivocally became the year of AI funding. Nearly one-third of all global venture capital flowed into AI-related companies, cementing artificial intelligence as the leading investment area. Funding to AI-focused companies reached over $100 billion, representing an 80% year-over-year growth from $55.6 billion in 2023, Crunchbase data indicates.
This surge in investment outpaced every previous year in the last decade, including the peak funding year of 2021.
Foundation model companies absorbed almost one-third of the AI investment, while the remaining two-thirds were distributed across sectors leveraging these new models. This included growth in infrastructure and data provisioning to manage and operate AI systems. Other leading sectors included autonomous driving, healthcare, robotics, professional services, security and military, according to Crunchbase data.
Q4 Boost
The improved total in 2024 was largely attributed to a strong performance in the fourth quarter, which saw the highest funding totals since the downturn of Q3 2022.
The final quarter of 2024 reached $93 billion, reflecting a 36% increase year-over-year from $69 billion in Q4 2023.
This contrasts with recent years, where Q4 typically experienced a slowdown. The 2024 fourth quarter closed with the largest rounds raised this year, totaling $22 billion across three companies.
Billion-Dollar Rounds on the Rise
A greater proportion of funding went to billion-dollar rounds in 2024, primarily driven by investment in the AI sector.
A total of $58.3 billion, or 19% of all funding, was allocated to billion-dollar rounds in 2024. In comparison, $45.8 billion, or 15% of funding, reached rounds of a billion dollars or more in 2023.
The fourth quarter saw increased momentum, with the largest valuations of the year achieved during this period. OpenAI was valued at $157 billion. Databricks secured a $62 billion valuation in the year’s largest venture deal, a $10 billion round. Additionally, xAI doubled its valuation within six months, reaching $50 billion.
Unsurprisingly, the biggest funding rounds of the year were directed towards companies in the AI sector.
Besides Databricks, OpenAI, and xAI, Waymo and Anthropic each raised funding of at least $4 billion or more. Other companies received large valuations within the AI domain: CoreWeave ($19 billion), Anthropic ($18.4 billion), Anduril Industries ($14 billion), Scale AI ($13.8 billion), and Perplexity ($9 billion).
US Leads the Way, Silicon Valley Thrives
Venture funding to U.S. companies totaled $178 billion, representing around 57% of total global funding.
The U.S. funding market gained a larger share of global funding, up from 48% in 2023. Within the U.S., $90 billion was invested in the San Francisco Bay Area, which experienced a boom in AI investing. In 2023, Bay Area companies raised a total of only $59 billion.
Late-Stage Funding Surge in Q4
Late-stage funding experienced a boom in the fourth quarter, reaching $61 billion, up more than 70% quarter-over-quarter. This also was an increase year-over-year of the $36 billion invested in Q4 2023 data by Crunchbase.
The most significant change in Q4 from the previous year was the increase in billion-dollar rounds. Substantial funding was raised across multiple sectors, including AI, applied AI, energy, semiconductors, banking, security, and aerospace, among others.
Early Stage Remains Flat
Early-stage funding was unchanged in Q4.
Significant early-stage rounds were allocated to data centers, renewable energy, AI, robotics, and biotech.
Seed Funding Settles
Seed funding was down in Q4, for now. Reaching $7 billion in Q4, seed funding was down 16% from the $8.4 billion invested a year ago.
(However, seed funding amounts are often added to the Crunchbase dataset after the close of a quarter, and seed funding should increase over time.)
Liquidity Challenges
2024 saw M&A activity slightly up compared to 2023, but slower than expected and somewhat focused in biotechnology and cybersecurity companies.
Amidst these limitations, Microsoft, Alphabet, and Amazon acquired AI teams from Inflection AI, Character.ai, and Adept AI, respectively. The regulatory environment hindered strategic deals. Nvidia was the most active acquirer in 2024 across this group.
The IPO market was slow in 2024, but ended on a positive note with the unexpected bump from the ServiceTitan IPO. This performance has pushed it above its IPO price by more than 40% as of the new year.
Beezer Clarkson, a partner at Sapphire Partners, said in an interview that a loosening of the IPO markets in 2025 will drive LP allocation to venture. “History just shows very clearly that when there’s positive liquidity, more money goes into venture funds,” she said.
Methodology
The data in this report comes directly from Crunchbase, and is based on reported data. The period of the data reported is as of January 3, 2025.
Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year. All funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs, and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.
Glossary of Funding Terms
- Seed and angel: Consists of seed, pre-seed, and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding, and convertible notes at $3 million (USD or as-converted USD equivalent) or less.
- Early-stage: Consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture, and other rounds above $3 million, and those less than or equal to $15 million.
- Late-stage: Consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also includes venture rounds of unknown series, corporate venture, and other rounds above $15 million.
- Corporate rounds: Only included if a company has raised an equity funding at seed through a venture series funding round.
- Technology growth: A private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)
