According to research firm CB Insights’ State of Venture Q2 report, AI-focused startups accounted for 28% of venture funding globally in the second quarter of 2024.
In the second quarter, $65.7 billion in venture capital flowed into startups across the globe. This represents an 8% quarter-over-quarter increase. However, the total number of deals declined for the ninth consecutive quarter, underscoring that even though venture funding is going up again, investors remain skeptical and selective.
Instead, VCs are making fewer, bigger deals, and AI seems to be a key factor in driving up deal sizes. In Q2 the average deal size was $14.4 million, up by 17% vs the same period in 2023.
According to the report, AI startups raised $18.3 billion in the second quarter.
A few outsized deals played an outsized role in AI’s big venture quarter, according to CB Insights. For example, Elon Musk’s +$1 billion raise for xAI. Scale and CoreWeave were also cited for raising mega-rounds in Q2.
These findings are discussed in an upcoming episode of the This Week in Local podcast that I co-host with my Localogy colleague Mike Boland.
Fintech Finds Its Footing
Another notable finding from the CB Insights report was that fintech funding globally reached $8.9 billion in Q2 2024. This represents a five-quarter high for fintech investment.
As with AI, a few outsized deals drove the fintech resurgence.
Huge ($600 million+) funding rounds in A2 for Stripe and AlphaSense helped drive this rebound.
Here are a few other notable findings in CB Insights report.
U.S.-based companies’ saw their share of global exit activity rise by 4 points to 39% in Q2 ‘24.
Meanwhile, startup funding to Asian startups fell below $10 billion for the first time since 2014, according to the report. This was attributed to a pullback on investment in Chinese tech companies. By contrast, the US and Europe both saw double-digit increases.
