Be part of our each day and weekly newsletters for the newest updates and unique content material on industry-leading AI protection. Be taught Extra
International enterprise capital investments rose to $368.5 billion in 2024, up 5.4% from $349.4 billion a yr earlier, in accordance with the primary take a look at the This fall 2024 Pitchbook-NVCA Enterprise Monitor report.
However the variety of international offers in 2024 fell 17% to 35,686 from 43,320 a yr earlier in 2023. AI offers as a share of all offers rose for the yr, as you may see within the chart beneath.
The 2024 international offers are down 50.9% from $751.5 billion within the peak yr of 2021 and down 37% from 57,068 in deal rely in 2021.
AI offers are huge a part of the image now. There have been 8,343 international AI offers in 2024, down 3.6% from 8,661 in 2023 and down 16.6% from 10,007 in 2021.
The worth of these international AI offers in 2024 was $131.5 billion, up from 52% from $86.3 billion in 2023 and down 6% from $140.2 billion in 2021.
AI and machine studying had been 35.7% of worldwide deal worth in 2024, up from 24.7% in 2023. And AI and machine studying had been 23.4% of the worldwide deal rely in 2024, up from 20% in 2023. In 2021, AI was 18.7% of worldwide deal worth and 17.5% of worldwide deal rely.
This fall international numbers
On the worldwide stage in This fall, Asia Pacific’s enterprise market has struggled by the previous few years, one thing that didn’t change in 2024, Pitchbook lead VC analyst Kyle Stanford mentioned.
In contrast with Europe and the U.S., the quantity of dry powder constructed up inside the varied markets throughout APAC was a lot smaller, additional pressuring dealmaking over the previous yr. China, which has pushed round half of the annual deal exercise for APAC, has seen a cloth decline in exercise, as a consequence of each financial challenges inside the nation, in addition to the tensions with the U.S. authorities, which has curtailed exercise by U.S.-headquartered companies. Simply 20.4% of deal rely occurred in Asia, the bottom proportion prior to now decade.
Globally, AI has continued to dominate the headlines and funding focus of traders regardless of some noting that the funding exercise isn’t sustainable long-term. Whether or not or not that true is trivial within the present second.
Simply over half of all VC invested globally throughout This fall went to an AI-focused firm. Its true that quantity was closely influenced by the likes of OpenAI, Databricks, xAI, and different well-known firms elevating for share buybacks and funding into chips and computing power wants, however crucial elements is the extent of capital availability for AI in contrast with different sectors, Stanford mentioned.
The proportion of whole offers going to AI firms has persistently elevated over the previous couple years as giant corporates and traders alike transfer to harness the anticipated efficiencies of the subsequent tech wave, he mentioned.
“VC-backed exits haven’t been sturdy traditionally for APAC, although many markets are nonetheless too younger to develop a wholesome exit surroundings,” he mentioned. “The dearth of exits throughout most of the areas has saved many overseas traders weary of elevated exercise through the market slowdown. Japan has been an outlier by way of rely, as many IPOs inside the nation have helped drive returns to traders. In 2024, 19% of the worldwide VC-backed exits originated in Asia-based firms.”
Fundraising has been gradual globally, as new commitments dropped simply over 20% YoY. The dearth of exits has had a big impression on fundraising for Asia as LPs have been much less inclined to reup commitments at the moment. 2024 marked the bottom yr for brand new commitments since 2018, and was the bottom yr for closed funds out there prior to now decade. North America and Europe equally struggled to safe new commitments to enterprise funds.
This fall U.S. offers
U.S. Dealmaking remained comparatively sturdy within the fourth quarter of 2024 from a rely perspective, and elevated barely by 3.7% in comparison with a yr earlier, Pitchbook and the NVCA mentioned. Within the quarter, AI offers accounted for almost half (46.4%) of whole US deal worth.
Stanford mentioned it appears counterintuitive to the narrative out there over the previous few years, however is indicative of holdover of sure mechanics of enterprise from just a few years in the past.
“What has occurred is that the surplus of dry powder from the excessive fundraising years of 2021 and 2022 have saved many traders lively out there regardless of the dearth of returns,” Stanford mentioned. “With the gradual fundraising years of 2023 and 2024, we must always doubtless see this relative robustness begin to deteriorate as fund run by their obtainable capital and aren’t capable of elevate a subsequent fund.”
Synthetic intelligence continues to be the story of the market, and drove a close to majority of {dollars} for VC in 2024, he mentioned. OpenAI, xAI, Anthropic, and others have grow to be synonymous with outsized offers in enterprise, and seemingly function in a unique funding surroundings than most VC-backed firms who proceed to wrestle with decrease capital availability, Stanford mentioned.
However the lack of exits stays the story of the enterprise market, even because the outlook is extra hopeful, he mentioned. Simply $149.2 billion in exit worth was created throughout 2024, largely coming from a handful of IPOs. Unicorns, which maintain round two-thirds of the U.S. VC market worth, have held tight as non-public firms, creating stress on traders and restricted companions with the dearth of distributions.
Merges and acquisitions had been was additionally “silent in 2024,” with few giant offers to notice, Stanford mentioned. A extra acquisition-friendly surroundings in 2025 may set the stage for a renewed M&A market, particularly if a soft-landing for the economic system will be absolutely engineered, he mentioned.
Within the U.S., fundraising was dominated by giant, established companies. Thirty companies accounted for greater than 68% of whole fundraising worth in 2024. This can be a pattern that has been growing over the previous few years, however hit a forefront final yr, Stanford mentioned.
Lots of the rising managers that raised funds through the ZIRP-era increase within the VC market have been unable to generate returns, and have portfolios troubled from the valuation adjustments which have occurred through the market shift. With no monitor file to talk to, many companies are discovering a really difficult market to lift new commitments from LPs, Stanford mentioned.
European VC market
In Europe, VC deal worth mirrored a slight decline, whereas deal counts dropped by roughly 16% in comparison with yr in the past, mentioned Pitchbook analyst Nalin Patel, as a extra cautious surroundings was on show in 2024.
European deal exercise was down throughout earlier financing phases, the vast majority of verticals, and a number of other areas as harder marketplace for funding was evident.
He mentioned AI drove simply over 1 / 4 of deal worth to the area throughout 2024, on simply greater than 23% of accomplished financings. The big, outsized offers attributable to different enterprise markets didn’t materialize in the identical quantity in Europe, holding the proportion of deal worth consistent with rely.
And he mentioned exit worth picked up in 2024, largely pushed by the itemizing of Puif. In any other case it was a quiet yr for European VC-backed exits, significantly on the listings entrance as firms averted exits.
“We count on exits to choose up in 2025 as market situations enhance,” Patel mentioned.
Capital raised by European-based VC funds was flat YoY in 2024 and remained beneath the height set in 2022. Fund counts additionally dipped in 2024 dropping by roughly by a fifth in comparison with 2023. Decrease fund counts and flat capital raised figures point out fewer, however bigger funds closed in 2024.
The outlook?
A method to take a look at how a lot dry powder the {industry} has and whether or not VCs are profitable themselves is to look how effectively they’ve performed elevating cash themselves. That’s the place the information seems to be pretty bleak, or at the very least is corrected now in comparison with the overhyped days of 2021.
In 2024, 1,344 funds raised capital, down from 2,333 in 2023 and a file 4,283 in 2021. By way of capital raised, the 1,344 VCs raised $169.7 billion in 2024, down from $213.8 billion in 2023 and down from the file $404.4 billion in 2021.
