Venture capital (VC) activity in 2024 saw a notable resurgence, driven primarily by advancements in artificial intelligence (AI) and a series of high-value megadeals. In Q2 2024, global VC investment surged to $94.3 billion, a five-quarter high, compared to $75.3 billion in Q1 (KPMG). This growth was heavily influenced by a handful of $1 billion+ deals, signaling continued confidence in AI and emerging sectors.
AI Leading the Charge
AI remained the top investment area in 2024, with investors focusing on startups developing large language models and AI applications across industries like healthcare, supply chain, and biotechnology. Notably, CoreWeave raised $8.6 billion, and xAI secured $6 billion in the U.S., driving VC investment in AI to new heights. In fact, without AI's influence, overall VC activity would have remained flat or declined in Q2.
FOMO (Fear of Missing Out) played a role as AI valuations rose sharply.
Regional Dynamics
The Americas, particularly the U.S., accounted for the lion’s share of VC funding, hitting $58.3 billion in Q2. Canada, Brazil, and Mexico also saw significant quarter-over-quarter growth, with Mexico’s VC investment jumping from $33 million to $225.9 million.
In Europe, VC investment climbed to $17.8 billion in Q2, thanks to mega-deals like Wayve’s $1 billion round. Asia, on the other hand, saw a decline from $20.8 billion to $17.4 billion, driven by a quiet quarter in China, although India and Singapore experienced growth.
Mega-Deals Driving Growth
Q2 2024 saw a significant increase in the number of $1 billion+ megadeals, with nearly ten companies securing such investments, more than double the number seen in Q1.
The U.S. led these deals, with CoreWeave’s $8.6 billion raise and xAI’s $6 billion funding as standout transactions.
Globally, e-commerce giants also contributed to the trend, with Lazada raising $1.96 billion in Singapore and Flipkart securing $1 billion in India. These massive deals underscored the increasing size and scale of venture capital investments, particularly in sectors like AI and e-commerce.
Final Take
While AI dominated, sectors like fintech, energy, and B2B solutions continued to attract attention. As the year progresses, the transformative power of AI is expected to keep driving VC investment, especially in the U.S. and Europe, while Asia could see a rebound assuming the stimulus works in China's market recovery.
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