Q2’24 Venture Pulse Report

A global overview of key findings uncovered from the Q2’24 Venture Pulse Report. Global VC investment reached a five-quarter high of $94.3 billion in Q2’24.

Global VC investment reached a five-quarter high of $94.3 billion in Q2’24. The Americas accounted for $58.3 billion of this total, including $55.6 billion in the US, while Europe attracted $17.8 billion and Asia attracted $17.4 billion. VC deal volume, however, remained sluggish — particularly in Europe and the Asia region.

$1 billion+ deals in every region helping drive VC investment globally

Globally, nearly ten companies attracted $1 billion+ VC deals in Q2’24, more than double the number seen in Q1’24 and was the second largest quarter of $1 billion+ mega-deals on record. The Americas accounted for the largest share of these deals, including an $8.6 billion raise by CoreWeave a $6 billion raise by xAI, a $1.2 billion raise by Juul, and $1 billion raises by Scale AI, Wiz, and Xaira Therapeutics — all within the US. The Asia-Pacific region saw two raises by e-commerce companies — a $1.96 billion raise by Singapore-based Lazada and a $1 billion raise by India-based Flipkart, while Europe saw UK-based Wayve raise $1 billion. UK-based Abound also raised $999.6 million during the quarter.

AI continues to drive big bets by VC investors

At a technology level, artificial intelligence (AI) remained the most attractive area of VC funding globally during Q2’24. Startups with AI plays, such as US-based companies like CoreWeave and xAI, France’s Mistral AI, and Germany’s DeepL raised large tickets, in part because of the extensive costs associated with the development and delivery of large language models (LLMs) and AI models. Corporates, particularly the global tech giants continued to pour money into the space during Q2’24.

The regulatory environment around AI will be critical to watch over the coming quarters. During Q2’24, the Council of the EU approved the AI Act — the first jurisdiction globally to harmonize rules related to the use of artificial intelligence.

Global IPO market still quiet, but hint of hope for Q3’24

The IPO market globally remained soft in Q2’24, although there were a few points of light. The US saw two solid IPOs in April, with cybersecurity firm Rubrik raising $752 million and tech marketing company Ibotta raising $577 million. In the UK, budget computer company Raspberry Pi raised $211 million in its June IPO in the second largest IPO in the UK during 2024. All three IPOs were seen as positive, with the potential for additional companies to follow their lead heading into Q3’24. With the US presidential election later this year, however, the IPO market is not expected to open fully until 2025.

Interest in defensetech growing globally

VC investors globally have shown an increasing interest in defensetech over the last few quarters. In the US, a number of defensetech companies have scaled to a size where they can compete with defense industry incumbents for contracts. Smaller defensetech companies have also been cropping up in other areas of the world, including in jurisdictions like Australia, India, and the UK. While this space has yet to see major consolidation, the next year or two could see a small number of large defensetechs moving to become public while their smaller counterparts become targets for acquisition by the large defense companies of the world.

Cybersecurity expected to gain more traction

While AI is expected to create major opportunities for companies around the world over the next few years, it will likely also create and heighten operational risks — particularly risks related to cybersecurity. With AI at their fingertips, threat actors will be better positioned than ever to drive cyber attacks. As companies look to protect their organizations, customers, and data, there will likely be an increase in investment in cybersecurity startups able to help companies combat and manage their AI cyber risks more effectively. Data protection and cyber resilience legislation in various jurisdictions, such as Europe’s Digital Operations Resilience Act, will likely also drive investment into the space as companies look for ways to better manage their compliance obligations.

Trends to watch for in Q3’24

VC investment globally is expected to remain relatively stable in Q3’24, although there could be a further increase in $100 million+ mega-deals as VC investors increasingly open their taps on funding in order to appease investors and potentially take advantage of emerging opportunities. At a global level, AI will likely remain the biggest area of VC investment, although some investors could begin to focus their investments on startups with truly unique AI value propositions rather than making broad-brush investments. Alternative energy and cleantech will likely also remain a high priority for investors — a trend not expected to wan soon in most regions given the every-increasing need to take action in order to meet future climate change commitments.

IPO activity globally could also pick-up in Q3’24 as startups look to take advantage of a brief window of potential opportunity prior to the US presidential election. A major uptick in IPO activity, however, is not expected until Q1’25 or Q2’25.

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