State Of – CB Insights Research

State of Venture Q1’25 Report

Alex Lee — Thu, 03 Apr 2025 14:48:01 +0000

Venture capital funding reached the highest level in nearly 3 years in Q1’25 — led by OpenAI’s mammoth $40B round — as AI continues to reshape the venture ecosystem.

Opportunities across stages and geographies have fueled growth in deal sizes globally. So far in 2025, the median deal size sits at a record $3.5M.

While AI continues to dominate headlines and venture activity, sectors like fintech, digital health, and retail tech all recorded quarterly funding increases as investors diversify beyond core AI infrastructure plays.

Download the full report to access comprehensive data and charts on the evolving state of venture across sectors, geographies, and more.

Below, we break down the top stories from this quarter’s report, including:

Quarterly funding jumps to $121B, even as deal count keeps falling
AI now drives 1 in 5 global venture deals
Eight early-stage AI companies raise $100M+ mega-rounds
Early-stage deal sizes pace at an all-time high
Billion-dollar M&A exits hit a new quarterly record

We also outline the key trends shaping venture dealmaking for the rest of 2025 — from AI agent specialization and the voice AI boom to crypto’s rebound.

Let’s dive in.

Predictions for venture dealmaking in 2025

Below, we use signals from public-company earnings calls, startup financing trends, and business relationships to predict which trends will dominate venture activity through the rest of 2025.

AI agents “niche down” and gain enterprise buy-in

AI agents are transitioning from concept to commercial application. They’ve become a frequent topic on corporate earnings calls, and according to a December 2024 CB Insights survey, 63% of organizations said they are placing significant importance on AI agents over the next 12 months. All respondents reported at least experimenting with agents.

These LLM-based systems represent an evolution beyond copilots. They can autonomously handle complex tasks — from sales prospecting to compliance decision-making — with limited human input. The market is expanding rapidly, with CB Insights data showing that over half of companies in the space were founded since 2023.

Investor interest is surging in parallel. AI agent startups saw more than 200 equity deals in 2024 — and activity is pacing toward similar levels this year.

Key investment themes emerging in the space include:

Specialized agents for specific business functions (sales, legal, finance)
Agent orchestration platforms that manage multiple agentic systems
Safety and alignment tools for ensuring agent behaviors match human intentions
Enterprise-grade agents with robust permissions and security frameworks

As agents become more capable and trustworthy, adoption will accelerate across industries.

Voice AI takes off amid technical advances

Voice AI is undergoing a technical transformation as models shift toward processing audio directly — bypassing the text intermediation stage — and approaching human-like conversation latency of under 300ms.

This technical progress has fueled substantial investment, with voice AI solutions raising $2.1B in 2024 and nearly $500M in Q1’25.

One standout is ElevenLabs, which reached $100M in ARR just 3 years after its founding and raised a $180M round in January from investors including a16z, Salesforce Ventures, and Sequoia Capital.

Despite these promising signals, the voice AI market remains in early development. CB Insights data shows approximately 85% of companies in the space are at levels 1-3 on the Commercial Maturity scale. Nearly half are developing or validating their products, while 39% have just begun commercial distribution.

As voice interfaces become more natural and capable, we expect to see investment opportunities emerge in several areas:

Domain-specific voice applications for industries like healthcare and legal
Voice AI trained on local languages not typically covered by general-purpose AI systems
Voice-first UI/UX for both consumer and enterprise applications

Crypto & blockchain rebound

After weathering a prolonged crypto winter, blockchain technologies are experiencing renewed institutional interest. Funding to crypto/blockchain companies reached $6.6B in Q1’25, putting the space on track to surpass $20B in annual funding. Earnings call mentions have climbed accordingly.

Several crypto companies now rank among the most likely IPO candidates, with platforms like Blockchain.com and Kraken showing IPO probabilities 64x higher than the average company tracked by CB Insights — a notable shift in public-market viability for the sector.

Another trend to watch is the growing institutional and government focus on stablecoins, as regulators develop frameworks to incorporate these digital assets into the traditional financial system.

Defense tech comes into focus

Military technology is entering a new era as investment shifts toward autonomous systems and AI-driven capabilities.

According to former Joint Chiefs of Staff Chairman General Mark Milley, smart machines and robotics could account for one-third of the US military presence within the next 15 years.

Funding to AI defense tech startups has already reached $1.5B this year — leading to a projected $6B by year-end. Last quarter saw earnings call discussion of defense reach an all-time high.

Much of this activity centers on multidomain operations (MDO) technologies — integrating systems across land, sea, air, space, and cyber — where AI is accelerating mission planning, threat detection, and battlefield connectivity. Major defense contractors are forming partnerships with AI startups to enhance battlefield management systems, mission planning capabilities, and integrated defense connectivity platforms.

As geopolitical tensions persist, defense tech investment is likely to continue growing, with particular focus on autonomous systems, AI-enhanced battlefield analytics, and advanced cybersecurity solutions for critical infrastructure.

Conclusion

The venture capital landscape in Q1’25 reflects key contrasts: record funding alongside declining deal count, significant early-stage deals vs. heightened expectations for follow-on capital, and a resurgence in billion-dollar exits despite broader market caution.

AI continues to influence capital allocation decisions across the venture ecosystem, but we’re seeing a shift from general infrastructure investments to specialized vertical applications and industry-specific solutions. Meanwhile, sectors beyond AI are showing resilience, with fintech, digital health, and retail tech all posting quarterly funding increases.

For investors, the data suggests maintaining a disciplined approach to AI investments while remaining alert to opportunities in adjacent sectors. The companies that successfully blend AI capabilities with sustainable business models will emerge as the defining ventures of this era.

For more insights on venture trends and emerging technologies, explore our related resources:

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State of Insurtech 2024 Report

Chris Sekerak — Thu, 13 Feb 2025 18:03:07 +0000

In 2024, investors continued to retreat from insurtech.

Just 113 investors made at least 2 equity insurtech investments during the year — a 72% drop from the high of 406 investors in 2021. As a result, insurtech dealmaking dropped to 362 deals, the lowest annual total since 2016.

Download the full report to access comprehensive data and charts on the evolving state of insurtech.

Key takeaways from the report include:

Insurtech dealmaking and funding continue to decline. Deal count fell 28% year-over-year (YoY) to 362 deals in 2024, while funding dropped 4% to $4.5B. Insurtech deals and funding are both at recent lows.
Quarterly funding to P&C insurtechs is in the gutter. P&C funding dropped 43% quarter-over-quarter (QoQ) to $0.4B in Q4’24 — a 7-year low — with annual funding also declining to $2.6B. The year’s 2 largest deals in P&C went to AI-focused startups Altana AI and Akur8, highlighting investors’ appetite for specialized AI opportunities.
Silicon Valley is dethroned as insurtech’s funding capital. Silicon Valley’s share of global insurtech funding dropped dramatically from 20% in 2023 to 10% in 2024, surpassed by New York at 15%. This was the first time since 2018 that Silicon Valley wasn’t No. 1.
Early-stage insurtechs raise record-high deal sizes. The median early-stage insurtech deal size surged 52% YoY to $3.8M in 2024 — outpacing the broader venture landscape — as investors concentrate on a more selective group of innovators.
Recently funded insurtechs show stronger business fundamentals and more efficient growth trajectories. Insurtechs that raised funding in 2024 have grown employee headcounts by a median of 20% over the last 12 months, far surpassing the 3% growth among those that raised during the funding boom of 2021.

Insurtech dealmaking and funding continue to decline

Insurtech deal count fell 28% YoY, from 500 deals in 2023 to 362 in 2024. The decline outpaced the broader venture environment, which saw deal count fall 19% YoY. 2024 was the worst year for insurtech dealmaking since 2016 (328 deals).

Deal volume among leading investors has also decreased. The number of investors that made 5 or more equity insurtech investments has fallen from 57 in 2021 to just 7 in 2024. Those that remain active now operate in a more favorable environment due to reduced competition across the marketplace.

Insurtech funding declined in 2024 as well, though by only 4% YoY.

Quarterly funding to P&C insurtechs is in the gutter

Q4’24 marked a 7-year low for P&C insurtech funding, which fell 43% QoQ to $0.4B. The decline caused broader insurtech funding to halve QoQ, from $1.4B in Q3’24 to $0.7B in Q4’24.

P&C deal count also fell 10% QoQ to 45 in Q4’24, the lowest level since Q2’16.

Annual P&C insurtech funding declined to $2.6B in 2024, a 7-year low, underscored by just 2 P&C insurtech startups raising $100M+ mega-round deals: Altana AI, which offers an AI-powered supply chain risk platform, and Akur8, an AI-powered pricing platform. Those deals signal appetite for specialized AI products for the insurance industry, coinciding with a global surge in AI funding to over $100B last year.

Comparatively, life & health insurtech saw an increase in annual funding and dealmaking. Funding increased 64% YoY to $1.8B in 2024, while deals ticked up from 126 in 2023 to 128 in 2024.

Silicon Valley is dethroned as insurtech’s funding capital

The share of global insurtech funding to Silicon Valley-based startups halved YoY, falling from 20% in 2023 to 10% in 2024. Comparatively, New York led the way with 15% of global insurtech funding share in 2024, more than doubling from 7% the year prior.

Silicon Valley is the world’s leading tech ecosystem, and venture-wide funding to the region’s startups soared last year amid a boom in AI investment. Given the ecosystem’s prominence, diminished insurtech activity in Silicon Valley could lead to missed opportunities for insurance-focused AI advancements.

Early-stage insurtechs raise record-high deal sizes

The median insurtech deal size increased from $4.1M in 2023 to $5.2M in 2024.

The increase was fueled by early-stage insurtechs, which saw median deal size surge 52% YoY, from $2.5M in 2023 to $3.8M in 2024. The size and growth rate both beat out the broader venture environment, where early-stage deal size increased 17% YoY to $2.1M.

Combined with the broader decline in dealmaking, larger check sizes indicate that investors are concentrating their investments on fewer bets. For the insurance industry, this dynamic points to a slimmer insurtech landscape with fewer high-growth participants moving forward.

On the other hand, late-stage insurtech deal sizes declined 19% YoY from $40M in 2023 to $32.5M in 2024.

The decline coincides with a restricted exit environment: Insurtech M&A exits fell from 57 in 2023 to 35 in 2024.

Nevertheless, notable exits include CCC Intelligent Solutions’s acquisition of EvolutionIQ in December at a valuation of $730M, as well as Applied’s purchase of Planck in July. Both acquisitions targeted genAI-enabled startups, signaling a broader appetite for genAI insurance offerings.

Recently funded insurtechs show stronger business fundamentals

Insurtechs that raised funding in 2024 are growing headcounts faster than other insurtechs, by a median of 20% over the last 12 months and 40% over the last 24 months.

Comparatively, median headcount growth among insurtechs that raised a funding round at the height of the funding boom in 2021 is marginal — just 3% over the last 12 months.

The higher growth rates of recently funded insurtechs suggest a new breed of companies with stronger fundamentals — they’re not only able to raise capital in a selective market but are also demonstrating more efficient growth than their 2021-funded counterparts.

By the same logic, investors and partners (like established brokers and carriers) should monitor the landscape for outliers that represent organic growth opportunities — such as insurtechs that haven’t raised funding in several years but continue to grow headcount at a steady clip.

MORE INSURTECH RESEARCH FROM CB INSIGHTS

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The State of AI: Charting the Course from 2024 to 2025

ashley.tortorelli@cbinsights.com — Tue, 11 Feb 2025 17:59:45 +0000

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State of Climate Tech 2024 Report

Thomas Hodson — Thu, 06 Feb 2025 16:40:03 +0000

Climate tech investment activity dropped significantly in 2024, with both funding and deals falling to their lowest levels since 2020.

A key factor in the slowdown was a sharp drop in funding from mega-rounds ($100M+ deals), which dropped 47% year-over-year (YoY) in 2024. This coincided with high-profile bankruptcies of established climate tech startups like battery manufacturer Northvolt.

However, this turbulence wasn’t limited to the private markets — public players like Lilium and Arrival also filed for insolvency/bankruptcy over the period, highlighting the commercialization challenges facing capital-intensive industries like climate tech.

Download the full report to access comprehensive data and charts on the evolving state of climate tech across sectors, geographies, and more.

Key takeaways from the report include:

Climate tech investment activity continues to contract. Global climate tech funding fell for the second year straight in 2024, dropping by 40% YoY, with mega-round funding falling by 47%. However, the space still saw notable mega-rounds. This included deals to players modernizing the power grid, drawing participation from tech giants racing to secure clean energy for computing infrastructure.
Grid tech and nuclear are gaining momentum to meet AI’s energy needs. Within climate tech, markets targeting the grid and power generation show the strongest growth potential, according to CB Insights Mosaic startup health scores. This momentum is driven in part by the massive energy demands (and expected continued demand) of AI data centers.
Electric vehicle technology sees record pullback in deals. After years of steady growth, electric vehicle (EV) tech deal activity plunged 61% YoY in 2024 — its steepest decline on record. This points to broader challenges in the sector, like lower consumer demand for EVs and increased capital costs for scaling manufacturing operations.
Climate tech M&A exits decline once again. Climate tech M&A exits dropped by 25% YoY to hit 284, the lowest count since 2020. At the quarterly level, M&A exits steadily declined over the course of 2024, falling from 104 in Q1’24 to 39 in Q4’24. Growing skepticism around environmental, social, and governance (ESG) initiatives could be a contributing factor.

We dive into the trends below.

Climate tech investment activity continues to contract

Global climate tech funding dropped for a second consecutive year in 2024. It fell by 40% YoY, with mega-round funding falling by 47% over the same period.

The funding slowdown played out differently across the globe. US climate tech showed resilience YoY with relatively steady funding despite fewer deals. Meanwhile, other countries saw steep declines in climate tech dollars, with China experiencing the sharpest drop (-66% YoY).

Amid the overall funding decline, climate tech still saw several notable mega-rounds. This included deals in Q4’24 for companies modernizing the power grid:

Crusoe secured $600M at a $2.8B valuation to support its efforts to use waste natural gas to power large-scale data centers
X-energy received $500M as it works to build small modular reactors (SMRs) capable of generating more than 5 gigawatts of electricity by 2039
Form Energy secured $405M to accelerate production of its iron-air batteries capable of 100-hour energy storage

Notably, some of these deals drew participation from big tech companies racing to secure clean energy for computing infrastructure. For example, Amazon (via the Climate Pledge Fund) invested in X-energy’s nuclear development, and Nvidia invested in Crusoe’s sustainable computing infrastructure, reflecting big tech’s interest in solutions that can help meet rising AI data center demands.

Grid tech and nuclear are gaining momentum to meet AI’s energy needs

Comparing median CB Insights Mosaic scores (a measure of private tech company health and growth potential on a 0–1,000 scale) for climate tech companies that raised equity funding in 2024 reveals the most promising markets in climate tech.

Grid tech and nuclear markets — covering technologies directly integrated into and operated by utilities to enhance power system reliability, flexibility, and clean energy integration — dominate the top 10 climate tech markets by median Mosaic score, highlighting their growth potential.

Surging energy demand from AI data centers is in part responsible for these markets’ momentum. For example, nuclear fusion and small modular reactors could provide continuous clean power generation, grid storage enables reliable renewable energy delivery, and virtual power plants help optimize massive power loads.

Electric vehicle technology sees record pullback in deals

Electric vehicle tech deals experienced their steepest decline on record in 2024, with deal count plunging 61% YoY to 243.

High-profile bankruptcies underscored the sector’s capital-intensive manufacturing challenges in 2024. Battery manufacturer Northvolt filed for bankruptcy a year after raising $1.2B, as it struggled to scale production efficiently. Electric van maker Arrival — which went public in 2021 at a $13B valuation — also filed for bankruptcy last year amid mounting production costs and the inability to raise funding.

Even the auto industry’s most prominent EV champions scaled back their electric ambitions throughout the year:

GM delayed its Orion Assembly EV truck plant by 6 months and cut 2024 EV targets by 17%
Toyota postponed US EV production to 2026
Ford canceled plans to produce an all-electric three-row SUV, pivoting to a hybrid approach instead
Volvo dropped its 2030 all-electric goal

Climate tech M&A exits decline once again

In 2024, climate tech M&A exits fell by 25% YoY to hit 284 — the lowest count since 2020.

At the quarterly level, M&A exits steadily declined over the course of 2024, falling from 104 in Q1’24 to 39 in Q4’24.

The decline in M&A activity coincided with key changes in market conditions, including the rise of economic headwinds, political uncertainty, and growing skepticism around environmental, social, and governance (ESG) initiatives.

For example, ESG tech markets collectively saw equity funding decline 54% YoY in 2024. On the corporate side, mentions of ESG in earnings calls have trended down since peaking in Q1’22.

As skepticism toward ESG initiatives grows, some companies appear to be placing lower priority on climate tech acquisitions that were previously considered strategic imperatives.

MORE CLIMATE TECH RESEARCH FROM CB INSIGHTS

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State of CVC 2024 Report

Benjamin Lawrence — Tue, 04 Feb 2025 14:00:45 +0000

Global CVC-backed funding rebounded 20% YoY to $65.9B in 2024, fueled by increased attention to US startups — especially AI companies, which drew record-high shares of both CVC-backed deals and funding.

However, global CVC deal count dropped to its lowest level since 2018 as CVCs become more selective.

Download the full report to access comprehensive data and charts on the evolving state of CVC across sectors, geographies, and more.

Key takeaways from the report include:

CVC-backed funding grows, deal activity slows. Global CVC-backed funding increased 20% YoY to $65.9B, but deal count fell to 3,434, the lowest level since 2018. All major regions saw deal volume declines, with Europe dropping the most at 10% YoY.
CVCs are all in on AI. AI startups captured 37% of CVC-backed funding and 21% of deals in 2024 — both record highs. Counter to the broader decline in deals, CVCs ratcheted up AI dealmaking by 13% YoY as they race to secure footholds in the space before competitors gain an insurmountable edge.
The flight to quality continues. Among deals with CVC participation, the annual average deal size hit $27.3M in 2024, tied for the second highest ever. Amid fewer deals, CVCs are increasingly aggressive when they do decide to invest.
Early-stage deals dominate. Early-stage rounds comprised 65% of 2024 CVC-backed deals, tied for the highest share in over a decade. Biotech startups made up half of the top 20 early-stage deals.
CVC-backed funding plummets in Asia. In 2024, Asia’s CVC-backed funding dropped 34% YoY to $7B — the lowest level since 2016. China is leading the decline, with no quarter in 2024 exceeding $0.5B in funding. CVCs remain wary of investing in the country’s private sector.

We dive into the trends below.

CVC-backed funding grows, deal activity slows

Global CVC-backed funding reached $65.9B, a 20% YoY increase. The US was the main driver, increasing 39% YoY to $42.8B. Europe also saw CVC-backed funding grow 18% to $12.3B, while Asia declined 34% to $7B.

$100M+ mega-rounds also contributed to the rise, ticking up 21% YoY to 141 deals worth over $32B in funding.

Meanwhile, deal count continued its decline, as both annual (3,434 in 2024) and quarterly (806 in Q4’24) totals reached their lowest levels in 6 years.

Annual deal volume fell by at least 6% YoY across each major region — the US, Asia, and Europe — with Europe experiencing the largest decline at 10%.

However, Japan-based CVC deal volume remains near peak levels, suggesting a more resilient CVC culture compared to other nations. Two of the three most active CVCs in Q4’24 are based in Japan: Mitsubishi UFJ Capital (21 company investments) and SMBC Venture Capital (15).

CVCs are all in on AI

AI is driving CVC investment activity, much like the broader venture landscape. In 2024, AI startups captured 37% of CVC-backed funding and 21% of deals, both record highs.

In Q4’24, the biggest CVC-backed rounds went primarily to AI companies. These include:

AI search startup Perplexity’s $500M Series C, backed by Nvidia’s NVentures
Coding AI copilot Poolside’s $500M Series B, backed by the venture arms for Citigroup, HSBC, Capital One, LG, eBay, and Nvidia
AI computing processor developer Lightmatter’s $400M Series D, backed by GV

CVCs are also investing in the energy companies powering the AI boom, such as Intersect Power, which raised the largest round at $800M (backed by GV).

Expect the trend to continue into 2025, as emerging AI markets mature further, such as AI agents & copilots for enterprise and industrial use cases; AI solutions for e-commerce, finance, and defense; and the computing hardware necessary to power these technologies.

The flight to quality continues

In 2024, the annual average deal size with CVC participation reached $27.3M, a 34% YoY increase and tied for the second highest level on record, exceeded only by the low-interest-rate environment of 2021.

Median deal size also increased, though only by 8% to $8.6M.

Even though the number of CVC-backed deals declined in 2024, the increase in average annual deal size reflects a focus on companies with strong growth prospects. CVCs are prioritizing quality and committing more funds to a select group of high-potential investments.

Early-stage deals dominate

Early-stage rounds (seed/angel and Series A) made up 65% of CVC-backed deals in 2024, tied for the highest recorded level in more than a decade.

In Q4’24, biotech companies were the early-stage fundraising leaders, accounting for 10 of the 20 largest early-stage deals. Biotech players City Therapeutics, Axonis, and Trace Neuroscience all raised $100M+ Series A rounds, with City Therapeutics and Axonis notably receiving investment from the venture arms of Regeneron and Merck, respectively.

Among all early-stage CVC-backed companies, the largest round went to Physical Intelligence, a startup focused on using AI to improve robots and other devices. Physical Intelligence raised a $400M Series A with investment from OpenAI Startup Fund.

CVC-backed funding plummets in Asia

Asia’s CVC-backed funding continued its downward trend in 2024, decreasing 34% YoY to $7B.

China was the main driver, with CVC-backed funding coming in at $0.5B or less every quarter in 2024. CVCs remain wary of investing in startups in the nation, which faces a variety of economic challenges, including a prolonged real estate slump, cautious consumer spending, strained government finances, and weakened private sector activity amid policy crackdowns.

In Japan, on the other hand, CVC activity remains robust. In 2024, funding with CVC participation ($1.7B) remained on par with the year prior, while deals (502) actually increased by 11%.

MORE VENTURE RESEARCH FROM CB INSIGHTS

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State of AI Report: 6 trends shaping the landscape in 2025

Isabelle Selles — Thu, 30 Jan 2025 14:00:00 +0000

2024 was a transformative year for the AI landscape.

Venture funding surged past the $100B mark for the first time as AI infrastructure players pulled in billion-dollar investments. A wave of M&A deals and rapidly scaling AI unicorns further underscored the tech’s momentum.

Download the full report to access comprehensive data and charts on the evolving state of AI across exits, top investors, geographies, and more.

Key takeaways include:

Massive deals drive AI funding boom. AI funding hit a record $100.4B in 2024, with mega-rounds accounting for the largest share of funding we’ve tracked to date (69%) — reflecting the high costs of AI development. Quarterly funding surged to $43.8B in Q4’24, driven by billion-dollar investments in model and infrastructure players. At the same time, nearly 3 in 4 AI deals (74%) remain early-stage as investors look to get in on the ground floor of the AI opportunity.
Industry tech sectors lose ground in AI deals. Vertical tech areas like fintech, digital health, and retail tech are securing a smaller percentage of overall AI deals (declining from a collective 38% in 2019 to 24% in 2024). The data suggests that companies focused on infrastructure and horizontal AI applications are drawing greater investor interest amid generative AI’s rise.
Outside of the US, Europe fields high-potential AI startup regions. While the US dominated AI funding (76%) and deals (49%) in 2024, countries in Europe show strong potential in AI development based on CB Insights Mosaic startup health scores. Israel leads with the highest median Mosaic score (700) among AI companies raising funding.
AI M&A activity maintains momentum. The AI acquisition wave remained strong in 2024, with 384 exits nearly matching 2023’s record of 397. Europe-based startups represented over a third of M&A activity, cementing a 4-year streak of rising acquisitions among the region’s startups.
AI startups race to $1B+ valuations despite early market maturity. The 32 new AI unicorns in 2024 represented nearly half of all new unicorns. However, AI unicorns haven’t built as robust of a commercial network as non-AI unicorns, per CB Insights Commercial Maturity scores, indicating their valuations are based more on potential than proven business models at this stage.
Tech leaders embed themselves deeper in the AI ecosystem. Major tech companies and chipmakers led corporate VC activity in AI during Q4’24, with Google (GV), Nvidia (NVentures), Qualcomm (Qualcomm Ventures), and Microsoft (M12) being the most active investors. This reflects the strategic importance of securing access to promising startups while providing them with essential technical infrastructure.

We dive into the trends below.

For more on key shifts in the AI landscape in 2025, check out this report on the implications of DeepSeek’s rise.

Massive deals drive AI funding boom

Globally, private AI companies raised a record $100.4B in 2024. At the quarterly level, funding soared to a record $43.8B in Q4’24, or over 2.5x the prior quarter’s total.

The funding increase is largely explained by a wave of massive deals: mega-rounds ($100M+ deals) accounted for 80% of Q4’24 dollars and 69% of AI funding in 2024 overall.

The year featured 13 $1B+ deals, the majority of which went to AI model and infrastructure players. OpenAI, xAI, and Anthropic raised 4 out of the 5 largest rounds in 2024 as they burned through cash to fund the development of frontier models.

Overall, the concentration of funding in mega-rounds reflects the high costs of AI development across hardware, staffing, and energy needs — and widespread investor enthusiasm around the AI opportunity.

But that opportunity isn’t limited to the largest players: nearly 3 in 4 AI deals (74%) were early-stage in 2024. The share of early-stage AI deals has trended upward since 2021 (67%) as investors look to ride the next major wave of value creation in tech.

Industry tech sectors lose ground in AI deals

Major tech sectors — fintech, digital health, and retail tech — are making up a smaller percentage of AI deals.

While the overall annual AI deal count has stayed steady above 4,000 since 2021, dealmaking in sectors like digital health and fintech has declined to multi-year lows. So, even as AI companies make up a greater share of the deals that do happen in these industries, the gains haven’t been enough to register in the broader AI landscape.

The data suggests that, amid generative AI’s ascendancy, AI companies targeting infrastructure and horizontal applications are drawing a greater share of deals.

With billions of dollars flowing to the model/infra layer as well, investors appear to be betting that the economic benefits of the latest AI boom will accrue to the builders.

Outside of the US, Europe fields high-potential AI startup regions

Although US-based companies captured 76% of AI funding in 2024, deal activity was more distributed across the globe. US AI startups accounted for 49% of deals, followed by Asia (23.2%) and Europe (22.9%).

Comparing median CB Insights Mosaic scores (a measure of private tech company health and growth potential on a 0–1,000 scale) for AI companies that raised equity funding in 2024 highlights promising regional hubs.

European countries dominate the top 10 countries by Mosaic score (outside of the US). Israel, which has a strong technical talent pool and established startup culture, leads the pack with a median Mosaic score of 700.

Overall activity on the continent is dominated by early-stage deals, which accounted for 81% of deals to Europe-based startups in 2024, a 7-year high.

The European Union indicated in November that scaling startups is a top priority, pointing to the importance of increased late-stage private investment in remaining competitive on the global stage.

AI M&A activity maintains momentum

The AI M&A wave is in full force, with 2024’s 384 exits nearly reaching the previous year’s record-high 397.

Acquisitions of Europe-based startups accounted for over a third of AI M&A activity in 2024. Among the global regions we track, Europe is the only one that has seen annual AI acquisitions climb for 4 consecutive years. Although the US did see a bigger uptick YoY (16%) in 2024, posting 188 deals.

In Europe, UK-based AI startups led activity in 2024, with 32 M&A deals, followed by Germany (18), France (16), and Israel (12).

Major US tech companies, including Nvidia, Advanced Micro Devices, and Salesforce, participated in some of the largest M&A deals of the year as they embedded AI across their offerings.

AI startups race to $1B+ valuations despite early market maturity

AI now dominates new unicorn creation. The 32 new AI unicorns in 2024 accounted for nearly half of all companies passing the $1B+ valuation threshold during the year.

These AI startups are hitting unicorn status with much smaller teams and at much faster rates than non-AI startups: 203 vs. 414 employees at the median, and 2 years vs. 9 years at the median.

These trends reflect the current AI hype — investors are placing big early bets on AI potential. Many of these unicorns are still proving out sustainable revenue models. We can see this clearly in CB Insights Commercial Maturity scores. More than half of the AI unicorns born in 2024 are at the validating/deploying stages of development, while non-AI new unicorns mostly had to get to at least the scaling stage before earning their unicorn status.

Tech leaders embed themselves deeper in the AI ecosystem

In Q4’24, the top corporate VCs in AI (by number of companies backed) were led by a string of notable names: Google (GV), Nvidia (NVentures), Qualcomm (Qualcomm Ventures), and Microsoft (M12).

As enterprises rush to harness AI’s potential, big tech, chipmakers, and other enterprise tech players are building their exposure to promising companies along the AI value chain.

Meanwhile, startups are linking up with these players to not only secure funding for capital-intensive AI development but also access critical cloud infrastructure and chips.

MORE AI RESEARCH FROM CB INSIGHTS

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State of Digital Health 2024 Report

Amrit Panjabi — Thu, 16 Jan 2025 14:00:30 +0000

Despite a small bump in funding, global digital health dealmaking continued to decline year-over-year (YoY) in 2024. In fact, digital health deal count dropped to its lowest annual total since 2014, reflecting a more cautious investment environment.

Mirroring trends in the broader venture market, AI proved to be a bright spot amid the downturn in digital health deals. In 2024, AI-focused companies secured 42% of digital health funding and accounted for 31% of deals — both record highs.

Download the full report to access comprehensive data and charts on the evolving state of digital health.

Key takeaways from the report include:

Digital health dealmaking continues to decline. Despite a slight increase in funding YoY, digital health deal count dropped again in 2024, hitting its lowest annual total (1,225) since 2014. Regionally, Europe saw the sharpest drop in deals, with a 29% YoY decline.
Fewer deals, bigger checks. The median digital health deal size jumped 39% YoY to hit a record high of $5.3M in 2024. The combination of declining deal volume and larger deal sizes suggests that selective investors are concentrating their resources on companies that meet heightened benchmarks in areas like clinical validation, commercial traction, and regulatory readiness.
AI takes center stage in digital health. In 2024, AI-focused companies captured 42% of digital health funding and 31% of deals — both record highs. The 5 largest AI-focused digital health deals were spread across diagnostics, drug development, and women’s health.
Digital health mega-rounds rebound in 2024. Mega-rounds ($100M+ deals) increased in 2024 after 2 years of decline, with the top 3 deals focused on drug discovery and development. Most top deals (7 out of 10) went to US-based companies, pointing to the region’s position as a hub for high-value digital health investment.

We dive into the trends below.

Digital health dealmaking continues to decline

Following 2 years of decline, digital health funding increased slightly in 2024, rising by 3% YoY.

However, digital health deal count fell for the third year straight in 2024. It dropped by 23% YoY to reach just 1,225 — its lowest level since 2014 — highlighting that investors remain cautious.

Regionally, Europe saw the steepest drop, with deal count shrinking 29% YoY to 258, despite a modest funding increase to $2.8B. Asia also experienced a decline, with deal count falling 19% YoY to 218, alongside a funding drop to $0.8B. While still the most active market, the US recorded a 19% YoY decline in deal count to 683, even as funding climbed to $11.7B.

Fewer deals, bigger checks

While the overall deal count fell, the median digital health deal size surged in 2024.

It climbed by 39% YoY to reach $5.3M — a record high.

This combination of factors suggests that selective investors are prioritizing companies that meet heightened benchmarks in areas like clinical validation, commercial traction, and regulatory readiness.

AI takes center stage in digital health

AI is commanding a growing share of digital health investment activity.

AI-focused companies captured 42% of total digital health funding and 31% of deal volume in 2024 — both record highs.

This surge reflects heightened investor confidence in AI’s ability to accelerate drug discovery, improve early disease detection, deliver personalized care, and more.

The top 2 AI-focused digital health deals in 2024 went to drug development platform Xaira Therapeutics. Freenome followed with a $254M Series F to expand its AI-driven early cancer detection tools, while Flo Health secured a $200M Series C to scale its personalized women’s health platform. BioAge Labs rounded out the top 5 with a $170M Series D to advance its AI-powered aging-related treatments.

As AI adoption grows across healthcare operations — from clinical and administrative workflows to drug development — healthcare providers and pharmaceutical giants will likely pursue strategic partnerships and acquisitions to maintain their competitive edge.

Digital health mega-rounds rebound in 2024

Digital health mega-round activity rebounded in 2024 after 2 consecutive years of decline, with deal count rising by 50% YoY to 33.

The top 3 mega-rounds of 2024 all went to drug discovery and development companies.

Xaira Therapeutics led the pack with two $500M rounds for its AI-driven drug discovery and development platform, followed by Formation Bio with a $372M Series D to advance its drug development efforts.

At the regional level, the US accounted for 7 of the top 10 mega-rounds in 2024, reflecting its position as a hub for high-value digital health investments.

MORE DIGITAL HEALTH RESEARCH FROM CB INSIGHTS

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State of Fintech 2024 Report

Laura Kennedy — Tue, 14 Jan 2025 14:00:41 +0000

Fintech funding and dealmaking declined again year-over-year (YoY) in 2024, hitting their lowest levels in 7 years.

However, some positive signals are emerging, including growing deal sizes and a pickup in M&A, with a focus on cybersecurity capabilities.

Download the full report to access comprehensive data and charts on the evolving state of fintech across sectors, geographies, and more.

Key takeaways from the report include:

Fintech dealmaking continues downward trend in 2024. Annual fintech deals and funding both dropped to 7-year lows in 2024. While deals dropped by 17% YoY to a total of 3,580, funding fell by 20% to $33.7B.
One positive signal: bigger deals. The median fintech deal size increased to $4M in 2024 — marking a 33% jump YoY — with deal sizes rising across every major global region. Across fintech sectors, the biggest jump occurred in banking, where the median deal size rose by 70% YoY to reach $8.5M. Though fintech saw fewer deals overall in 2024, the increase in deal sizes suggests that investors are writing bigger checks for companies with compelling growth potential.
M&A activity is also picking up. Fintech M&A exits jumped 24% quarter-over-quarter (QoQ) to 189 in Q4’24, with Stripe’s $1.1B purchase of stablecoin platform Bridge marking the quarter’s largest deal. Overall, fintech saw a total of 664 M&A exits in 2024 (up 6% YoY) as financial services companies sought to diversify their capabilities and build full-service platforms.
Mature banking companies are catching the eyes of investors. Banking saw mid- and late-stage deals rise to 38% of its total deal volume in 2024 (vs. 21% in 2023), outpacing the 4 percentage point increase in fintech more broadly. Uncertainty about new banking technology and regulatory volatility — particularly among banking-as-a-service players — is likely driving investors to more proven solutions.
Payments tech ends 2024 as a bright spot. Five of the top 10 equity deals in Q4’24 went to companies building payments solutions, from mobile payments apps to cross-border payments enablement tools to platforms digitizing B2B payments. This concentration of large deals within payments tech reflects the ongoing push to digitize commerce and business exchanges.

We dive into the trends below.

Fintech dealmaking continues downward trend in 2024

In 2024, annual fintech funding and dealmaking both decreased YoY, hitting 7-year lows.

However, there are signs that the fintech market is steadying. The annual decline in funding was fintech’s smallest in 3 years. Meanwhile, at the quarterly level, funding rebounded to close the year strong, increasing 11% QoQ to reach $8.5B in Q4’24.

One positive signal: bigger deals

While there are fewer fintech deals overall, deal sizes are climbing.

Following 2 consecutive years of decline, the median deal size in fintech jumped 33% YoY in 2024.

Across fintech sectors, banking saw the biggest jump in median deal size in 2024 — a 70% YoY increase to $8.5M.

This shift reflects increased investor selectivity in the current market. Companies that pass more rigorous due diligence are attracting larger investments, even as overall deal volume remains constrained.

M&A activity is also picking up

Fintech M&A deals jumped 24% QoQ in Q4’24.

US-based companies captured 8 of the largest 10 deals, including the top 5. Stripe’s $1.1B acquisition of Bridge was the largest of the quarter.

The quarterly increase points to broader stirrings of an M&A resurgence: for the year, fintech M&A exits rose by 6% YoY to 664 deals in 2024.

Acquirers are boosting capabilities across functions. For instance, Stripe’s purchase of stablecoin platform Bridge gives the company a stronger standing in the reinvigorated market for digital assets and boosts its cross-border payment capabilities. The deal also emphasizes stablecoins’ growing role in driving accessibility and stability within crypto’s current wave.

Bolstering cybersecurity was also a focus for acquirers in Q4’24, pointing to financial services companies’ push to integrate fraud detection in their product offerings. For example, in November 2024, IT company N-able bought Adlumin, which deploys its solutions to financial firms, to enhance its cybersecurity capabilities. In October, Socure — specializing in digital identity verification — acquired Effectiv to enhance its AI-driven fraud detection capabilities.

Mature banking companies are catching the eyes of investors

Early-stage deals made up a larger share of fintech investment activity in 2022-23, suggesting that investors shifted their focus toward nascent innovation requiring smaller capital commitments during the market slowdown.

The trend shifted in 2024, particularly in the banking sector. While mid- and late-stage deal share rose by 4 percentage points YoY across fintech broadly, it jumped 17 percentage points in banking.

Recent volatility in banking-as-a-service — such as Synapse’s bankruptcy in April — and intensified regulatory scrutiny are likely driving investors to more proven solutions.

Payments tech ends 2024 as a bright spot

Five of the 10 biggest fintech deals in Q4’24 went to payments companies, capping a relatively strong quarter for the sector. Despite a YoY decline, funding to payments companies rose by 20% QoQ to $1.8B in Q4’24.

Argentina-based mobile payments company Ualá secured a $300M Series E in Q4’24, tying home equity release firm Splitero for the largest round of the quarter.

Of the top payments deals, two went to companies automating accounts payable and other aspects of B2B payments (Melio and ASAAS). The opportunity to digitize B2B payments continues to expand, especially since businesses in many geographies still rely on manual processes.

Related resources from CB Insights:

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State of Venture 2024 Report

Alex Lee — Tue, 07 Jan 2025 15:00:28 +0000

AI has reshaped the venture landscape, capturing a record share of funding (37%) and deals (17%) in 2024, including 5 of the year’s largest deals.

But beyond the momentum building in AI, global deal activity plunged 19% YoY to its lowest level since 2016, creating both challenges and opportunities for investors and corporate strategists.

Download the full report to access comprehensive data and charts on the evolving state of venture across sectors, geographies, and more.

Key takeaways from the report include:

AI is eating VC. In 2024, AI represented 37% of venture funding and 17% of deals — both all-time highs. AI infrastructure players raised all of the top 5 venture deals of the year, with 4 closing in Q4’24 alone — driving a 2-year high in quarterly funding. With nearly 3 in 4 (74%) AI deals being early-stage in 2024, investors are staking out early claims to reap the rewards of the tech’s potential.

Aside from AI, venture dealmaking is in a drought. Globally, deal activity fell 19% YoY to 27K in 2024 — its lowest annual level since 2016. The drop was most pronounced in countries like China (-33% YoY), Canada (-27%), and Germany (-23%). However, several countries in Asia — Japan, India, and South Korea — have bucked the downward trend. Their resilience suggests attractive investment conditions.

AI and industrial automation are common themes among the fastest-growing tech markets. Out of 1,400+ tech markets that CB Insights tracks, those with the highest rate of YoY deal growth include enterprise AI agents, genAI for customer support, industrial humanoid robots, and autonomous driving systems. Expect these technologies to continue maturing in 2025, increasing their disruptive potential.

Despite market uncertainty, early-stage valuations hit a record-high median of $25M in 2024. Investors are packing into early-stage rounds to ride the next major wave of value creation in tech, likely drawn by startups’ ability to now build products with less capital and fewer people thanks to AI tools and infrastructure. However, early-stage startups could face a reality check when they try to raise later-stage rounds if they have yet to prove they can sustain growth. Although mid- and late-stage deal valuations rebounded slightly vs. 2023, they remain muted compared to 2021 and 2022.

IPO timelines get delayed. From first funding to IPO, VC-backed companies that went public in 2024 waited a median of 7.5 years — 2 years longer than in 2022. Amid unfavorable market conditions, some late-stage players like Stripe and Databricks have resorted to raising additional equity funding or selling private shares in lieu of going public. This allows them to create liquidity for early investors and employees when the path to a public debut is rocky.

We dive into each trend below.

AI is eating VC

The 5 largest deals of the year all went to AI model and infrastructure players (led by Databricks’ $10B Series J, followed by a $6.6B round for OpenAI, two $6B rounds for xAI, and a $4B round for Anthropic). But the activity isn’t limited to the largest, most well-resourced AI players.

Across the board, AI companies are capturing a higher share of deal volume — nearly one in 5 deals (17%) now go to AI companies, almost triple the share from 2015 (6%). AI deal volume remained above 4,000 for the fourth year in a row.

The boom is providing tailwinds for every stage of the startup lifecycle, from early-stage companies — which take 3 out of 4 deals in AI — to startup exits. The AI M&A wave is in full force, with 2024’s 384 exits nearly rivaling the previous year’s record-high 397.

This trend will continue in 2025 as incumbents look to grab AI tech and talent and build end-to-end AI offerings. Get the full breakdown of what AI M&A means for corporate strategy in our Tech Trends 2025 report.

In Q4’24, the AI boom helped fuel a substantial rebound in global funding. The quarter’s funding tally reached $86.2B — a 2-year high, and an increase of 53% quarter-over-quarter (QoQ).

60% of that quarterly total, or $52B, came from mega-rounds (deals worth $100M+) — nearly tying Q1’21 (61%) for the highest share ever across venture.

At the same time, quarterly deal volume steadily declined throughout 2024, including slipping below 6,000 in Q4’24 for the first time since 2016.

Aside from AI, venture dealmaking is in a drought

Despite AI’s surge, most venture sectors face their worst dealmaking drought in nearly a decade, forcing investors to adjust their strategies. Many investors are taking a more selective and risk-off approach right now as they wait out macroeconomic volatility and geopolitical tensions.

Among major dealmaking countries and regions (those seeing 500+ deals per year), the slump was most pronounced in China (-33% YoY drop in deals), Canada (-27%), and Germany (-23%).

However, several countries in Asia bucked the trend and notched slim YoY gains: Japan (+2%), India (+1%), and South Korea (+1%). These countries have invested heavily in developing their startup ecosystems and may be benefiting indirectly from investors diverting funds away from China.

AI and industrial automation are common themes among the fastest-growing tech markets

AI and industrial automation are at the center of some of the fastest-growing markets in tech.

We filtered CB Insights’ 1,400+ tech markets for those with at least 20 equity deals over the last 2 years, then singled out those with the strongest deal growth YoY in 2024.

The enterprise tech and industrials sectors dominate, comprising 9 of the top 10 tech markets. Advancements in generative AI are fueling much of the activity in areas like humanoid robots and autonomous driving systems. Investors are also backing tech companies improving industrial processes like water treatment and purification, with deals to the market more than doubling YoY.

The enterprise tech and industrials sectors are also seeing a wave of hiring, as they lead in YoY headcount growth among all sectors. Industrials markets saw an average of 11% headcount growth last year, followed by enterprise tech markets with 10%.

Financial services and the consumer & retail industries are noticeably absent from the top 10 fastest-growing markets. Given the tough venture landscape, emerging technologies in these areas face an uphill battle.

Early-stage deals are showing strength

Globally, early-stage dealmaking represents one of the most vibrant areas of venture right now, with median deal size and valuation reaching all-time highs in 2024.

The seed/angel and Series A stages remain resilient despite the broader downturn, in part because investors view them as a safe haven to ride out late-stage challenges like constricted exit opportunities and capital constraints. Deal sizes and valuations for the mid- and late stages rebounded slightly vs. 2023 but were muted when compared to the boom times of 2021 and 2022.

Corporate strategy and development teams seeking out early-stage opportunities can see 900+ high-potential startups here. To identify these players, we looked at the nearly 11,000 VC-backed startups that raised seed or Series A rounds in 2024, then filtered for those with the healthiest businesses (600+ Mosaic score) and strongest management teams (600+ Management Mosaic score).

IPO timelines get delayed

Most tech firms continue to shirk the IPO market. Some are still waiting for macroeconomic conditions to stabilize, while others prefer to focus on topline growth without having to deal with the financial scrutiny that comes with being a public company.

This is pushing back the timelines for IPO-ready companies even further.

From first funding to IPO, VC-backed companies that went public in 2024 waited a median of 7.5 years — 2 years longer than in 2022.

While Q4’24 saw an uptick in global IPOs, activity remains down vs. historical levels. In the current climate, many late-stage startups will likely opt instead to raise more private funding to sustain operations and pay out employees or early investors.

Related resources from CB Insights:

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Venture Trends for 2025

ashley.tortorelli@cbinsights.com — Thu, 19 Dec 2024 14:41:32 +0000

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State of Insurtech Q3’24 Report

Chris Sekerak — Thu, 14 Nov 2024 14:00:36 +0000

Global insurtech funding held steady at $1.4B for the second consecutive quarter in Q3’24. However, unlike the prior quarter, most of the funding came from just 5 mega-rounds (deals worth $100M+).

Q3’24 also saw the most selective dealmaking environment in years, although there were notable bright spots — in the early stages of funding, in the life & health insurance segment, and among France’s insurtechs.

Download the full report to access comprehensive data and charts on the evolving state of insurtech across sectors, geographies, and more.

Below, we cover key shifts in the landscape, including:

Quarterly insurtech funding holds mostly steady from Q2’24, at $1.4B. In Q3, the funding was evenly split across both P&C and life & health (L&H) segments — one of just 3 quarters since 2020 where L&H insurtechs have rivaled P&C for quarterly funding.

Insurtech fared better in Q3’24 than the broader venture environment, which saw funding decrease 20% quarter-over-quarter (QoQ). In fact, on a year-over-year basis, insurtech funding grew in Q3 by 27%.

A majority of insurtech funding goes to $100M+ mega-round deals for the first time since Q3’22. Q3’24 saw mega-round funding and deals — $0.8B across 5 deals — surge to a 2-year high.

Altana AI, which offers a supply chain risk platform, raised the largest insurtech equity deal in 2024 so far ($200M Series C) from investors including Google Ventures and Salesforce Ventures. The deal valued Altana AI at $1B, making it the first new insurtech unicorn of 2024 so far. Insurtechs that offer Medicare Advantage plans raised 2 of the other mega-round deals, Devoted Health ($112M Series E) and Zing Health ($140M Series A).

Insurtech deal count falls to an 8-year low. Q3’24 saw global insurtech deal count decline to 77, falling 10% QoQ and 42% YoY. Q2’16 was the last quarter to see fewer insurtech deals (60).

Even so, the drop is in line with a broader decline in venture dealmaking. Also, across insurtech and the broader venture environment, the percentage of deals by deal stage (i.e., early, mid-, late, or other) has been without drastic swings in recent years.

The median early-stage insurtech deal size has reached a record high, increasing from $2.5M in 2023 to $4M in 2024 so far. This signals that investors remain bullish on early-stage dealmaking despite the broader decline in funding and deals.

Comparatively, the median early-stage insurtech deal size only reached $3M in 2022 amid the venture funding boom.

Three of the 10 largest insurtech deals in Q3’24 were early-stage.

France-based insurtechs raise 83% of Europe’s insurtech funding in Q3. Five France-based insurtechs raised a combined $385M in Q3’24, including mega-round deals for health insurer Alan ($193M Series F) and pricing platform Akur8 ($120M Series C).

Globally, only insurtechs from France and the US appeared among the 10 largest insurtech deals of the quarter.

RELATED RESEARCH FROM CB INSIGHTS:

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The State of AI Q3’24: Emerging Trends

Adya Pandey — Tue, 12 Nov 2024 19:34:03 +0000

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State of Climate Tech Q3’24 Report

Thomas Hodson — Thu, 07 Nov 2024 14:00:34 +0000

Q3’24 saw climate tech funding and deals reach their lowest points in 4 years.

Despite the declines, global regions like the US and Europe have made gains in median deal sizes this year, and both the US and EU continue to provide government grants and loans to climate tech solutions. China, on the other hand, has rolled back some of its clean energy subsidies, and VC enthusiasm has waned in the country this year.

Globally, governments are focusing more on early-stage technologies that are ready for commercialization. Two prime examples in the US are nuclear fusion energy and direct air capture of CO2, both of which have received substantial funding from the US Department of Energy this year.

Download the full report to access comprehensive data and charts on the evolving state of climate tech across sectors, geographies, and more.

Below, we cover key shifts in Q3’24.

Climate tech funding falls to $4.8B in Q3’24, marking the lowest point since Q2’20. Venture capital has shifted away from the sector as high interest rates impact climate tech’s capital-intensive projects and as investors pivot toward AI, which tends to feature more rapid developments and shorter commercialization timelines.

M&A activity drops dramatically in Q3’24, with only 43 deals completed — a more than 50% decline from the previous quarter. While notable exits like Kyte Powertech ($277M valuation) and SRE Power ($72M) suggest a steady appetite for grid infrastructure solutions, the overall slowdown signals a more selective M&A environment, potentially limiting exit opportunities for highly valued climate tech companies.

US and European deal sizes show resilience despite the slowdown in global funding. In the US, the median deal size has reached $6M in 2024 YTD (up from $4.3M in 2023), while Europe’s median deal size has grown to $4.9M (up from $3.7M in 2023), indicating sustained investor confidence in these markets.

Despite declines in overall climate tech funding, companies commercializing solutions in carbon capture, utilization, and storage (CCUS) continue to secure significant capital, as demonstrated by Twelve‘s $200M Series C round in September. Twelve is using the funding to finish building its Washington state facility, where it will produce sustainable aviation fuel (SAF) that it claims can deliver up to 90% emissions reduction compared to conventional jet fuel.

Source: CB Insights — Twelve Funding Insights

Electric vehicle technology funding reaches a critical low of $0.6B in Q3’24, marking its lowest point since early 2020. However, the sector still attracted notable deals, including 24M Technologies‘ $87M Series H round at a $1.3B valuation, pointing to selective investor appetite for more mature EV tech companies.

More energy resources from CB insights:

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State of CVC Q3’24 Report

Benjamin Lawrence — Thu, 31 Oct 2024 13:00:57 +0000

In Q3’24, global CVC-backed funding fell 5% quarter-over-quarter (QoQ) to $15.7B — alongside a 10% decline in deals — as investors navigated persistent macroeconomic headwinds from global inflation pressures and elevated interest rates to China’s economic challenges.

Despite these declines, $100M+ mega-rounds comprised 51% of total CVC-backed funding in Q3’24, a notable increase from a quarterly average of 37% in 2023. Meanwhile, two-thirds of CVC deals this year have gone to early-stage companies, highlighting a strategic shift toward more emerging opportunities, especially in AI.

Based on our deep dive in the full report, here is the TL;DR on the state of CVC:

Global CVC-backed funding drops 5% to $15.7B in Q3’24. Nevertheless, that figure is still the second-highest quarterly level since the beginning of 2023. Meanwhile, a 10% QoQ decline to 773 deals — the lowest total since 2018 — suggests that CVCs are increasingly selective, similar to the wider venture market.

The average CVC-backed deal size has increased 31% so far this year to $27.1M, highlighting investors’ willingness to take risks when they find the right opportunity. However, the median deal size remains the same as last year at $8M, signaling that investors are only more aggressive regarding the largest deals.

Funding to CVC-backed mega-rounds (deals worth $100M+) represents 51% of total funding in Q3’24. This percentage — roughly in line with the first 2 quarters of 2024 — is up significantly from an average of 37% in 2023, further suggesting that investors are currently willing to make large bets when they decide to invest.
Early-stage rounds represent 66% of total CVC deal share this year, the highest level in over a decade. CVCs are increasingly focused on early-stage startups, likely driven by the record levels of AI funding and the fact that, across investor types, 72% of deals to AI companies this year are early-stage.

CVC-backed funding in the US ticks up to $10.5B. Among major global regions, the US continued to lead in CVC-backed funding in Q3’24, followed by Europe at $2.6B and Asia at $1.3B. Within the US, defense tech provider Anduril raised the largest CVC-backed deal with its $1.5B Series F round (CVC investors include Franklin Venture Partners), followed by AI chip developer Groq with its $640M Series D round (backed by Samsung Catalyst).

MORE VENTURE RESEARCH FROM CB INSIGHTS

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State of AI Q3’24 Report

Adya Pandey — Tue, 29 Oct 2024 13:00:04 +0000

In Q3’24, global AI deal count skyrocketed 24% QoQ to reach 1,245 — its highest quarterly level since peaking in Q1’22. This contrasted sharply with activity in the broader venture sphere, where deal count fell by 10% QoQ to hit its lowest level since 2016/2017.

While AI deals in Q3’24 included massive $1B+ rounds to defense tech provider Anduril and AI lab Safe Superintelligence, global AI funding actually dropped by 29% QoQ. This was driven by a 77% decline in funding from $1B+ AI rounds QoQ.

Based on our deep dive in the full report, here is the TL;DR on the state of AI:

Global AI deal count climbs 24% QoQ to reach 1,245 — its highest quarterly level since peaking in Q1’22. This bucked the trend in overall venture deals (-10% QoQ), signaling that investor interest in AI remains strong despite the broader cooling in venture markets. AI funding, on the other hand, fell by 29% QoQ to $16.8B, driven by a 77% decline in funding from $1B+ AI rounds QoQ.

The average AI deal size is $23.5M in 2024 so far — up 28% vs. $18.4M in full-year 2023. This upward trend has been influenced by a rise in massive $1B+ deals, with AI startups drawing 9 of these deals in 2024 so far vs. 4 in full-year 2023. Top $1B+ rounds in 2024 YTD include:
- xAI — $6B Series B at a $24B valuation
- Anthropic — $2.8B Series D at an $18.4B valuation
- Anduril — $1.5B Series F at a $14B valuation
- G42 — $1.5B investment from Microsoft
- CoreWeave — $1.1B Series C at a $19B valuation

These deals aren’t solely responsible for pushing up the average — the median AI deal size is up 9% in 2024 so far.

AI unicorn births more than double QoQ to reach 13 — 54% of the broader venture total in Q3’24. Generative AI continues to be a key theme for new unicorns (private companies reaching $1B+ valuations). More than half of the AI unicorns born in Q3’24 are genAI startups, and they are working across a variety of areas — including AI for 3D environments (World Labs), code generation (Codeium), and legal workflow automation (Harvey).

Among new genAI unicorns in Q3’24, Safe Superintelligence — co-founded by OpenAI co-founder Ilya Sutskever — landed the most sizable valuation. The AI lab was valued at $5B after raising a $1B Series A round in September 2024.

AI M&A exits fall by 48% QoQ to hit 62 in Q3’24. The deals that did occur showcase how enterprises are strategically scooping up AI startups to improve their offerings and maintain a competitive edge. For example, the largest AI M&A deal in Q3’24 was AMD’s acquisition of AI lab Silo AI, which could help the semiconductor company enhance the development and deployment of AI models on its hardware. Meanwhile, Salesforce picked up unstructured data management startup Zoomin to support its AI agent offerings.

Among major global regions, the US continues to lead in AI funding and deals. AI startups based in the US drew $11.4B across 566 deals in Q3’24, accounting for over two-thirds of global AI funding and 45% of global AI deals. Within the US, Silicon Valley still dominates AI funding and deals, but other metros are gaining ground. In Q3’24, Los Angeles and New York saw their AI deal counts rise QoQ while Silicon Valley watched its count drop for the second quarter straight.

ADDITIONAL AI RESEARCH FROM CB INSIGHTS:

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State of Digital Health Q3’24 Report

Amrit Panjabi — Thu, 17 Oct 2024 13:00:18 +0000

Despite a small bump in deals, digital health funding fell once again in Q3’24, hitting its second-lowest quarterly level since 2017.

Meanwhile, M&A activity is on the rise, climbing for the second straight quarter in Q3’24.

Based on our deep dive in the full report, here is the TL;DR on the state of digital health:

Global digital health funding drops 23% QoQ to hit $3.3B in Q3’24, marking the second-lowest quarterly funding level since 2017. This decline comes despite a slight uptick in deal count QoQ. However, the average deal size in 2024 YTD is $17.8M — a 51% increase from the full-year 2023 average of $11.8M. This jump in average deal size, amid a downturn in deals over the same period, reflects that investors are concentrating larger sums on fewer, later-stage ventures.

Digital health mega-round deals ($100M+ deals) drop slightly in Q3’24, falling from 9 to 7 QoQ. Meanwhile, mega-round funding and share of total funding also declined QoQ, underscoring a more cautious investor approach. Mega-rounds accounted for 30% of total digital health funding in Q3 — down from 44% in Q2. Top Q3’24 mega-rounds (by round amount) included:
- Women’s health app Flo Health‘s $200M Series C
- Digital-first health insurance provider Alan‘s $193M Series F

The US accounts for 52% of digital health deals in Q3’24, down from 61% in Q2. Meanwhile, Europe and Asia both saw their deal shares rise to 21% in Q3. Asia experienced a greater jump in deal share, gaining 7 percentage points QoQ while Europe gained 3. This shift suggests growing investor interest in markets outside of traditional US hubs.

Q3’24 sees the emergence of 2 new digital health unicorns — both based in Europe. The newest members of the digital health unicorn club are UK-based Flo Health, a women’s health app, and Huma, a remote patient monitoring platform. Against the backdrop of a broader downturn in new digital health unicorns, these births highlight Europe’s growing importance in the digital health landscape.

Digital health M&A exits continue to climb in Q3’24, rising 23% QoQ to 37. This rising M&A appetite may be partly fueled by established companies seizing opportunities to scoop up innovative technologies amid a challenging funding environment for startups. The largest M&A deal in Q3’24 was LetsGetChecked’s $525M acquisition of digital pharmacy Truepill.

MORE DIGITAL HEALTH RESEARCH FROM CB INSIGHTS

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State of Fintech Q3’24 Report

David Himmel — Tue, 15 Oct 2024 13:00:20 +0000

On the surface, Q3’24 was a sobering quarter for fintech. Funding declined by 25% from Q2’24, to $7.3B. Total deals also dropped 16% quarter-over-quarter (QoQ) to 753 — their lowest quarterly level since 2017.

However, average deal size has remained roughly stable in 2024 YTD, suggesting dealmakers are putting more money behind a select group of fintech companies.

Download the full report to access comprehensive data and charts on the evolving state of fintech across sectors, geographies, and more.

Below, we cover key takeaways from the report.

Global fintech funding sinks to $7.3B, a 25% QoQ decline. However, Q2’24 funding was propped up in part by mega-rounds for Stripe and AlphaSense totaling $1.3B. Excluding those rounds, the decline from Q2’24 to Q3’24 would have been 13%.

Deal volume drops 16%. Total deals for fintechs continued to decline, falling 16% from 892 in Q2’24 to 753 in Q3’24. This marks the lowest quarterly level since 2017. For comparison, fintech deal volume clocked in at nearly 1,500 two years ago, in Q3’22 — roughly double where it stands now.

Average deal size remains stable at $12.7M. Despite deal volume declining, average deal size has remained roughly flat YTD, at $12.7M, compared to $13.2M for full-year 2023. The decline in deal volume and stable deal size indicates dealmakers narrowed their focus to fewer, higher-dollar bets.

52% of the top early-stage deals are in less-crowded fintech markets. Just over half of the top early-stage deals occurred in financial services markets outside the US and UK — in countries like France, India, Italy, and Kenya. Less-crowded markets like these offer more room for early-stage fintechs to find niches and grow their client bases.

Wealth tech funding increases by 67%, thanks to 2 $100M+ mega-rounds. Wealth tech funding increased the most of any fintech sector QoQ, from $0.6B in Q2’24 to $1.0B in Q3’24. The increase was fueled by 2 substantial deals:
- $242M Series F round for turnkey retirement plan provider Human Interest.
- $200M Series B round for Earned Wealth, a digital wealth manager targeting medical professionals.

ADDITIONAL FINANCIAL SERVICES RESEARCH FROM CB INSIGHTS:

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The VC Outlook: Q3’24 Recap & Emerging Market Trends

Benjamin Lawrence — Tue, 08 Oct 2024 14:53:45 +0000

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State of Venture Q3’24 Report

Alex Lee — Thu, 03 Oct 2024 13:00:39 +0000

AI has established a commanding presence across the VC landscape.

In some ways venture has become less dramatic. The period of steep decline in funding that followed the dizzying heights of 2021 has given way to relatively moderate quarterly variations.

But even in a more sober fundraising environment, excitement over AI has become a major driving force for investors. One in every 3 VC dollars now goes to the tech. Silicon Valley, a major AI hub, is tightening its hold on investor cash. AI startups are exiting years faster than those working on other technologies.

As interest rates fall and the appetite for riskier assets increases, expect AI startups to be top of mind for an increasing number of investors in the months ahead.

Download the full report to access comprehensive data and charts on the evolving state of VC across sectors, geographies, and more.

Below, we cover key shifts in the landscape, including:

Quarterly declines in global VC funding and deals
AI startups grab 1 in 3 VC dollars
Performance from recent tech IPOs
Silicon Valley is only getting stronger
New unicorns remain rare
The US claims the bulk of AI innovation
How global VC stacks up against economic output
76% of top deals go to B2B startups
AI startups exit 6 years sooner than the rest of tech

Let’s dive in.

Topline figures paint a sobering picture for venture, as both global funding and deals ticked down quarter-over-quarter (QoQ). The quarterly levels place Q3’24 on par with where VC was in 2016/2017.

However, while deal volume has progressively declined, the size of deals that do happen has grown. In 2024 so far, the average deal clocks in at $13.9M (up from $12M in full-year 2023), while the median is worth $3M (up from 2023’s $2.5M).

The more cautious investment environment is likely driving a flight to quality as selective investors isolate the most promising ventures.

AI startups are capturing nearly a third (31%) of all venture funding right now — the second-highest share on record, following Q2’s 35%.

Within AI, a company’s age and stage don’t always correlate to the size of financing rounds. One of the largest rounds in Q3’24, for instance, was a mammoth $1B deal to Safe Superintelligence (SSI) — an early-stage startup founded in June by OpenAI co-founder Ilya Sutskever. The company has just 10 employees.

SSI’s deal is the 9th $1B+ AI equity round this year. Given their willingness to participate in such large rounds to so many companies, investors appear confident that a new tech giant will emerge from the space — and apparently have FOMO.

Yet despite investors’ bullishness, many of today’s fledgling AI startups will struggle to live up to lofty expectations, and some will ultimately fail. Even AI giants like OpenAI face the daunting task of keeping costs in control: the AI leader’s losses are expected to amount to $5B this year.

The AI boom is also giving recent public debuts a boost.

We analyzed 15 of the companies with the largest tech IPOs since 2022 to see whether they’ve gained or lost value since they filed to go public. The majority (10 out of 15) have either held steady or gained value as public players — a positive indicator for tech IPOs more broadly, which until recently were getting beaten down badly in the public markets. The fact that startups are able to maintain and even gain value as public companies will likely draw out other IPO-ready companies.

And AI is an important factor driving gains for several of these companies. For instance:

Arm’s value has nearly tripled since it debuted late last year. The chip designer is a leader in CPUs for AI computing hardware, including providing the architecture for AI chip firms like Nvidia.
Tempus is deploying AI across its precision medicine offerings, which has helped buoy its value by 31% since its IPO filing. (It legally changed its name from Tempus Labs to Tempus AI in early 2023.)
Like Arm, Astera Labs, which offers AI infrastructure & connectivity hardware, has benefited from the swell in widespread adoption of AI. Its value has grown 45% since filing in March 2024.

It’s not universal — enterprise AI firm 4Paradigm, for instance, has seen its value slashed by over half since debuting. But this could be due more to geopolitical forces, as China-based 4Paradigm has faced an uphill battle in sustaining investor interest because of US restrictions. (4Paradigm was placed on a US export control list in early 2023.)

Another result of the AI explosion: Cash is concentrating in Silicon Valley, home to over a third of the US-based AI startups. In fact, the metro’s share of US venture funding — across sectors — has climbed to a recent high of 41% this year.

In Q3’24, Silicon Valley-based startups raised $10.5B — more than 2.5x that of New York ($3.9B), the second-ranked metro. LA and Boston follow, with $2.9B and $2.8B, respectively.

Notably, deal activity in Silicon Valley remains overwhelmingly early-stage — meaning it’s not just a handful of more established startups raising massive rounds. More than two-thirds of Silicon Valley’s deals this year are at the seed or Series A stages.

Newly minted billion-dollar startups remain few and far between. Q3’24 saw 24 startups reach that mark — a noticeable bump from the previous quarter’s 16, though a fraction of what we saw during the tech boom of 2021 and early 2022.

Valuations remain pressured at the later stages of investment, with many of the unicorns minted in years gone by likely worth less than $1B in reality. On the other hand, valuations are showing strength at the earlier stages. Among seed-stage startups, the median valuation for deals this year is $13.5M — the highest annual level on record.

There are a few common themes among the latest batch of new unicorns:

AI is minting more unicorns than any other sector. More than half of the new unicorns in Q3’24 are AI companies. Among these, several are working to bring greater spatial awareness to AI systems, from Skild AI’s intelligent humanoid robotics to World Labs’ 3D world-building tools. Others are developing enterprise AI agents & copilots, like Harvey in the legal domain and Codeium in software engineering.
India’s startups are climbing the ranks. The country contributed 3 of Q3’24’s new unicorns: Ather Energy, MoneyView, and Rapido. India ranks third globally for total unicorns after the US and China, and it had a strong funding quarter in Q3’24, with startups raising $4B — up 29% QoQ and 111% YoY.
a16z and Sequoia are the most active investors in backing new unicorns. The investors each backed 4 of Q3’24’s freshly minted $1B+ companies. Andreessen Horowitz invested in Saronic Technologies, World Labs, Story Protocol, and Safe Superintelligence; while Sequoia Capital backed Skild AI, Harvey, Chainguard, and Safe Superintelligence.

CB Insights tracks over 15,000 AI startups globally. And while 99 countries and regions around the world have at least 1 AI startup, the US is the undisputed leader in AI startup activity — and by a substantial margin.

43% of all AI startups are based in the country. The distant No. 2 and No. 3 countries are China (9% of AI startups) and the UK (7%).

While the US has long dominated the global venture scene when it comes to absolute funding and deal activity, several countries rank above the US in terms of the ratio of venture funding to GDP: the United Arab Emirates, Israel, and Singapore.

These 3 countries pace ahead of the US in terms of VC as a proportion of overall economic activity, suggesting they are punching above their weight in terms of fostering startup activity.

For instance, UAE-based startups have raised over $3B in funding over the last year (since 10/1/2023), and the country’s 2023 GDP came in at $504B. That represents $1 in VC to $158 in GDP (1/158) — a stronger ratio than any other country with at least $1B in annual venture funding.

Activity in the region has recently been fueled by AI firm G42, which raised a $1.5B round from Microsoft in April. (As part of the deal, G42 will use Microsoft’s Azure cloud offering, and Microsoft will also gain access to G42’s data centers.)

Israel and Singapore hold the No. 2 and 3 spots, with venture funding to GDP ratios of 1/166 and 1/198, respectively.

Right now, the venture capital industry is all in on B2B startups. Among the 100 largest deals in Q3’24, three-fourths went to startups that use a B2B business model (either exclusively or in combination with other models like B2C or B2G).

The B2B distribution model — particularly at the enterprise level — has gained appeal in recent years as a potentially more stable, recurring source of revenue for startups, especially during periods of volatile consumer spending.

The buzz around AI is translating to faster exit velocity for startups in the space. Breaking down all the exits that have taken place this year, it’s clear AI startups exit at a much faster rate — 6 years faster, to be exact. It takes the median AI company just 7 years to exit from the year it was founded, compared to 13 years for non-AI companies.

While this trend holds true for recent AI IPOs, it’s most commonly seen among M&A deals, which represent the vast majority of AI exits this year.

Corporations are among the top acquirers of AI startups, with many looking to gain an edge by rapidly adding novel AI tools to their product suites.

Nvidia has acquired 3 AI startups this year: Deci and Run:ai, both in April; and OctoAI, just last week. All 3 operate at the infrastructure layer of AI development and signal Nvidia’s ambitions to expand across the AI software stack.
Zendesk has acquired 2 customer service-focused players — Ultimate and Klaus — as it builds out its own AI agent offering to automate customer interactions.
Salesforce has similarly pledged to go all in on AI agents. To this end, it acquired 2 AI startups last month: Tenyx and Zoomin.

Another driving factor is “acqui-hires,” where an acquirer purchases a startup primarily for its talent. We’ve seen this among some of the youngest AI startups to be acquired. For instance, SydeLabs and Laiyer, both founded in 2023, were acquired by Protect AI this year. In both cases, Protect AI absorbed the startups’ teams.

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State of Climate Tech Q2’24 Report

Thomas Hodson — Tue, 13 Aug 2024 13:00:11 +0000

Climate tech funding dropped QoQ in Q2’24, reaching its lowest quarterly level since Q2’20. While deal count jumped QoQ, it still remained well below 2023’s quarterly totals.

Amid the funding decline, investors are favoring smaller mid- and late-stage deals. However, they are still willing to place early-stage bets where they see strong opportunities.

Based on our deep dive in the full report, here is the TL;DR on the state of climate tech:

- Global climate tech funding declines by 20% QoQ to $4.9B in Q2’24 — the lowest quarterly total since Q2’20. While deal count rebounded QoQ to 397 in Q2, it still came in well below 2023’s quarterly totals.

- Climate tech doesn’t see any unicorn births (private companies reaching $1B+ valuations) in Q2’24, marking climate tech’s second straight quarter without any new unicorns. This coincides with a decline in late-stage deal sizes — the median deal size at that stage is $38M in 2024 YTD, down 16% vs. full-year 2023.

- Late-stage deal sizes decline, while early-stage sizes show strength. The median late-stage deal size is $38M in 2024 YTD — down 16% from full-year 2023. In contrast, median early-stage size is up 39% YTD, suggesting that investors are still willing to place bets where they see strong early-stage opportunities. Two of the largest early-stage deals in Q2’24 went to Cylib and Aether Fuels. Both companies intend to use the funding to scale and support commercialization initiatives — goals that are generally communicated by later-stage companies.

- $100M+ mega-rounds continue to trend down in Q2’24. Climate tech mega-rounds dropped from 17 in Q1’24 to 9 in Q2’24. The majority of Q2’24’s mega-round recipients are focused on scaling operations and achieving full-scale commercialization. For example, one of the quarter’s largest deals ($375M Series G) went to battery materials developer Sila, which plans to use the funding to ramp up silicon anode production.

Source: CB Insights — Sila Funding Insights

Climate tech funding drops yet again in Asia. Climate tech startups in the region raised a total of $0.4B in Q2’24, down 33% QoQ and 89% YoY. China suffered the sharpest funding decline (-90% QoQ) among highlighted countries in the region. India and Japan watched funding fall by 28% and 57% QoQ, respectively.

More energy resources from CB insights

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State of Insurtech Q2’24 Report

Chris Sekerak — Tue, 06 Aug 2024 13:00:59 +0000

Global insurtech funding increased 44% quarter-over-quarter (QoQ) to $1.3B in Q2’24 — outpacing the quarterly growth seen across the broader venture and fintech landscapes.

We provide a deep dive on the state of insurtech in the full report. Here’s the TL;DR:

Global insurtech funding increases to $1.3B in Q2’24 — the highest level since Q1’23. Insurtech funding grew 44% QoQ — led by 50% growth in funding to P&C insurtechs, from $0.6B to $0.9B. Funding to life & health (L&H) insurtechs also increased QoQ, ticking up from $0.3B to $0.4B.

Insurtech deal count falls 27% QoQ to 82, the lowest level since 2016. The drop was nearly proportional across P&C and L&H: P&C deals fell 28% to 54 deals, while L&H deals decreased by 26% to 28 deals. On a percentage basis, the decline in insurtech deals outpaced the broader venture and fintech environments (where deal activity fell 7% and 16% QoQ, respectively).

Median insurtech deal size increases 25% from $4M in 2023 to $5M in 2024 YTD. Only 2021 has seen a higher median deal size over the past 10 years. However, while the median early-stage insurtech deal size is at a record-high $4M this year, late-stage deal size ($31M) is the lowest it’s been since 2018. Insurtech mega-rounds (deals worth $100M+) were nearly nonexistent in Q2, with Sidecar Health, a health insurer, raising the quarter’s only such deal (a $165M Series D).

Insurtech sees its first IPOs since Q3’22. Two insurtechs IPO’d in Q2’24 — Digit Insurance, an India-based insurance provider, and Saudi Arabia-based Rasan, which primarily focuses on auto insurance sales and vehicle services. Both IPOs occurred amid a broader lull in global IPO activity.

Europe’s share of insurtech deals reaches 35% — a record high. Deals to Europe-based insurtechs stayed roughly steady, ticking up from 28 in Q1’24 to 29 in Q2’24. Comparatively, the US saw insurtech deal count fall from 61 to 40. Funding to Europe-based insurtechs reached a 7-quarter high ($0.5B), driven by two $93M deals for Finland-based ICEYE — a provider of data from satellite imagery — and UK-based Vitesse, a claims payments processor.

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State of CVC Q2’24 Report

Benjamin Lawrence — Wed, 31 Jul 2024 13:00:55 +0000

In Q2’24, funding with participation from corporate venture capital (CVC) outfits grew for the second straight quarter, ticking up from $15.4B to $15.6B, while deals fell 12% quarter-over-quarter (QoQ) to 782 — their lowest total since Q1’18.

Massive rounds to AI companies were a key driver of the funding growth, with 3 of the 5 largest CVC-backed deals this quarter going to AI infrastructure players Scale ($1B), Mistral AI ($502M), and Cohere ($450M).

Based on our 124-page report, here is the TL;DR on the state of CVC:

Global CVC-backed funding climbs to $15.6B in Q2’24. Over half ($8.4B) of this funding came from $100M+ mega-rounds. Meanwhile, global deal volume declined by 12% QoQ to 782. This drop was particularly pronounced in Asia, which saw a 24% drop in deals QoQ.
This year, the average CVC-backed deal size is $26.6M, up 27% from $20.9M in full-year 2023. The increase is due in part to billion-dollar deals to startups like Scale ($1B Series F, backed by the CVC arms of Intel, AMD, Cisco, and ServiceNow) and Wiz ($1B Series E, backed by Salesforce Ventures).
CVC-backed funding to digital health startups falls 57% QoQ to 0.6B, its lowest point since Q4’17. Retail tech and fintech saw similar decreases, with funding down 52% and 8% QoQ, respectively. Companies not explicitly focused on AI face challenges raising funds in the weakened venture market.

Quarterly CVC-backed funding in China slips to $0.2B, a 60% QoQ decrease. Deal volume also fell 24% QoQ to 59, its lowest level since 2015. China’s tech market has faced significant challenges, including rising macroeconomic concerns, escalating geopolitical tensions, and a strict regulatory environment.

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State of AI Q2’24 Report

Emily Hunt — Tue, 30 Jul 2024 18:00:55 +0000

Global AI funding climbed once again in Q2’24, jumping 59% QoQ to hit $23.2B — the highest quarterly level on record. Massive rounds to a handful of startups, including Elon Musk’s xAI, were key drivers behind the jump, which outpaced the growth in broader venture funding (+8% QoQ).

Meanwhile, overall AI deal volume broke its extended freefall in Q2’24, rising by 16% QoQ to reach 948. This bucked the trend in venture deals more broadly (-7% QoQ).

Based on our deep dive in the full report, here is the TL;DR on the state of AI:

Global AI funding increases 59% QoQ to $23.2B in Q2’24 — the highest quarterly level on record, exceeding even the level seen during 2021’s venture boom. The jump was driven by a handful of $1B+ rounds and outpaced the growth in broader venture funding (+8%). Meanwhile, AI deal count climbed by 16% QoQ to reach 948, bucking the trend in venture deals more broadly (-7% QoQ).

Average AI deal size is $28.9M in 2024 so far — up 55% vs. $18.6M in full-year 2023. A relatively small number of players have had an outsized impact on this upward trend, raising massive $1B+ deals in Q2’24:
- xAI — $6B Series B at a $24B valuation
- G42 — $1.5B investment from Microsoft
- CoreWeave — $1.1B Series C at a $19B valuation
- Wayve — $1.05B Series C from Softbank, Microsoft, and Nvidia
- Scale — $1B Series F at a $13.8B valuation

Meanwhile, the median AI deal size is up 25% in 2024 so far.

AI unicorn births remain steady at 6 QoQ in Q2’24. Generative AI was a key theme for new unicorns (private companies reaching $1B+ valuations). Some of these companies, like xAI, are focused on generative AI infrastructure. Others are primarily working on generative AI applications, like Perplexity (search) and Cognition (coding).

Among new AI unicorns in Q2’24, xAI landed the most sizable valuation. The company was valued at $24B after raising $6B in Series B funding, which it plans to use to bring its first products to market.

AI companies raise 32 mega-rounds (deals worth $100M+) in Q2’24, marking a 28% increase QoQ. Meanwhile, funding from AI mega-round deals climbed 74% QoQ in Q2’24. This was largely driven by US mega-round deals, which collectively amounted to $10.8B — 67% of AI mega-round funding in Q2.
Among major global regions, the US continues to lead in AI funding and deals. AI startups based in the US drew $15.2B across 476 deals in Q2’24. This equates to 66% of the global AI funding total and 50% of the global deal total in Q2.

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State of Digital Health Q2’24 Report

Ja Lee — Thu, 18 Jul 2024 13:00:37 +0000

Investor dollars in digital health slowed in Q2’24, while deal volume dropped to its lowest quarterly level since 2014.

Amid the decline, investors have shifted their focus to writing fewer, larger checks for more mature companies in the digital health ecosystem. Meanwhile, their interest in early-stage companies has cooled.

Based on our deep dive in the full report, here is the TL;DR on the state of digital health:

Global digital health funding declines by 26% QoQ, with funding falling to $2.9B across 235 deals in Q2’24 — the lowest quarterly deal volume seen since 2014. However, the annual average deal size globally is $16.7M in 2024 YTD, up 40% from the average for full-year 2023, signaling that investors are writing fewer but larger checks.

US deal share grows to 61%, up from 54% in Q1’24. While digital health funding in the US declined by 18% QoQ in Q2’24, the US’ proportion of the global deal volume grew, marked by an increase in mid- to late-stage deal share. Median deal size is also up in the US in 2024 so far — sitting at $7.5M vs. $4.6M in full-year 2023.

Mid-stage deal share jumps to 26% in 2024 YTD, while early-stage deal share falls by 14 percentage points. Early-stage deals have consistently accounted for 60%+ of all digital health deals in recent years. However, in 2024 YTD, early-stage deal share has dropped to 51% as mid- and late-stage deals have captured more investor interest. In the US, early-stage deal share has fallen to 45% in 2024 YTD vs. 62% in full-year 2023.

$100M+ mega-rounds drop off in Q2’24 but are more varied across the digital health landscape. Digital health mega-rounds dropped from 8 in Q1’24 to 5 in Q2’24. While mega-rounds were focused on biotech in Q1’24, they were more spread out in Q2’24, spanning areas like care navigation, ultrasound tech, and value-based care tools. The largest deal of the quarter ($200M Series D) went to Foodsmart — a telenutrition company focused on chronic disease management.

Source: CB Insights — Foodsmart Funding Insights

Digital health exits increase in Q2’24, rising from 26 to 32 QoQ. AI-driven platforms were the highlight here, with Tempus (precision medicine) and XtalPi (drug R&D) going public via IPO and Nuvo Group (remote pregnancy monitoring) going public via SPAC. Digital health M&A exit activity also picked up in Q2’24, especially in Europe, which saw M&A deals jump from 5 to 10 QoQ. Globally, virtual care, provider workflow tools, and drug R&D platforms were key categories for M&A in Q2’24.

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State of Fintech Q2’24 Report

David Himmel — Tue, 16 Jul 2024 13:00:48 +0000

On the surface, Q2’24 was a return to growth for fintech, with funding increasing 19% quarter-over-quarter (QoQ) to $8.9B.

However, two huge deals — for market intelligence firm AlphaSense and payments juggernaut Stripe — obscured the reality that it was another tepid quarter for the sector as a whole.

Based on our deep dive in the full report, here is the TL;DR on the state of fintech:

Funding increases by 19% quarter-over-quarter (QoQ), buoyed by 2 blockbuster deals. Quarterly funding rose in Q2’24 to $8.9B. But if it weren’t for 2 late-stage deals for Stripe ($694M) and AlphaSense ($650M), funding would have remained flat QoQ. A 16% decline in deal volume also indicates fintech investors remain cautious.
Average deal size decreases to $12.8M, down 4% vs. 2023. The slight decline in average deal size YTD highlights broad stagnation in fintech deal sizes. Yet, when looking at the median, deal size has ticked up from $3.1M in 2023 to $4M this year. The 29% increase could signal strength in the long tail of smaller fintech deals.
Mid- and late-stage deal share is at 20% YTD, up from 18% in 2023. In a more favorable operating environment, investors are showing greater confidence in later-stage companies than they did in the past 2 years — especially in areas like payments and lending. In payments, mid- and late-stage rounds make up 27% of deals YTD, vs. 21% in 2023. In digital lending, mid- and late-stage deals make up 35% of deals YTD, compared to 20% in 2023.
30% of the biggest early-stage deals are for digital asset companies. Crypto and blockchain-focused fintechs are receiving renewed focus, as the crypto winter thaws. Digital asset companies accounted for nearly one-third of the top 10 seed/angel and top 10 Series A rounds. The two largest early-stage deals in the crypto space went to digital asset infrastructure platforms TradeDog ($75M seed) and Biton ($44M Series A).
US-based funding increases by 45% QoQ to $4.8B. In addition to the funding increase, the US led the world across a few metrics in Q2’24, including share of equity deals (40%) and exits (36%). Mega-rounds led the way: Nine of the 10 biggest deals in the US were worth $100M or more, the most since Q2’22. LatAm was the only other major global region with a funding increase, up by 22% to $442M.

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State Of – CB Insights Research

State of Venture Q1’25 Report

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Top stories in Q1’25

1. Quarterly funding jumps to $121B, even as deal count keeps falling

2. AI now drives 1 in 5 venture deals

3. Eight early-stage AI companies raise $100M+ mega-rounds

4. Early-stage deal sizes pace at an all-time high

5. Billion-dollar M&A exits hit a new quarterly record

DOWNLOAD THE STATE OF VENTURE Q1’25 REPORT

Predictions for venture dealmaking in 2025

AI agents “niche down” and gain enterprise buy-in

Voice AI takes off amid technical advances

Crypto & blockchain rebound

Defense tech comes into focus

Conclusion

State of Insurtech 2024 Report

DOWNLOAD THE STATE OF INSURTECH 2024 REPORT

Insurtech dealmaking and funding continue to decline

Quarterly funding to P&C insurtechs is in the gutter

Silicon Valley is dethroned as insurtech’s funding capital

Early-stage insurtechs raise record-high deal sizes

Recently funded insurtechs show stronger business fundamentals

MORE INSURTECH RESEARCH FROM CB INSIGHTS

The State of AI: Charting the Course from 2024 to 2025

State of Climate Tech 2024 Report

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Climate tech investment activity continues to contract

Grid tech and nuclear are gaining momentum to meet AI’s energy needs

Electric vehicle technology sees record pullback in deals

Climate tech M&A exits decline once again

MORE CLIMATE TECH RESEARCH FROM CB INSIGHTS

State of CVC 2024 Report

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CVC-backed funding grows, deal activity slows

CVCs are all in on AI

The flight to quality continues

Early-stage deals dominate

CVC-backed funding plummets in Asia

MORE VENTURE RESEARCH FROM CB INSIGHTS

State of AI Report: 6 trends shaping the landscape in 2025

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Massive deals drive AI funding boom

Industry tech sectors lose ground in AI deals

Outside of the US, Europe fields high-potential AI startup regions

AI M&A activity maintains momentum

AI startups race to $1B+ valuations despite early market maturity

Tech leaders embed themselves deeper in the AI ecosystem

MORE AI RESEARCH FROM CB INSIGHTS

State of Digital Health 2024 Report

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Digital health dealmaking continues to decline

Fewer deals, bigger checks

AI takes center stage in digital health

Digital health mega-rounds rebound in 2024

MORE DIGITAL HEALTH RESEARCH FROM CB INSIGHTS

State of Fintech 2024 Report

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Fintech dealmaking continues downward trend in 2024

One positive signal: bigger deals

M&A activity is also picking up

Mature banking companies are catching the eyes of investors

Payments tech ends 2024 as a bright spot

Related resources from CB Insights:

State of Venture 2024 Report

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