Record high on the venture capital market in Q4 2024

The global venture capital (VC) market staged an impressive comeback in the fourth quarter of 2024: After several subdued months, investments worldwide rose to a seven-quarter high of USD 108.6 billion, spread across 7,022 deals. The main drivers of this development were eight mega deals totalling over USD 36 billion. Particularly noteworthy are the AI company Databricks, which completed the largest VC round ever registered in the USA with funding of USD 10 billion, as well as OpenAI (USD 6.6 billion) and Waymo (USD 5.6 billion).

The AI sector thus remains a guarantor of growth and has attracted over USD 32 billion in investments from mega deals alone. In addition to service providers such as Databricks, the focus was also on start-ups that use artificial intelligence specifically to solve industry-specific challenges. One notable example is the US company Waymo, which uses AI for autonomous driving technologies. 

Other deals underline the global appeal of the AI sector: the Turkish marketing platform Insider received USD 500 million, the British platform Lighthouse for the hospitality industry secured USD 370 million, Didi Autonomous Driving in China attracted USD 298 million and the South Korean analytics start-up SurroMind raised USD 283 million.

• Europe: In the fourth quarter of 2024, venture capital investments in Europe rose to a volume of USD 12.5 billion, which is a recovery compared to the previous quarters, but the total investment volume for 2024 remained below the figures for 2023. The UK led the region, particularly due to the record funding of the AI platform GreenScale with USD 1.2 billion. France and Germany followed as the second and third largest VC markets in Europe.
• Americas: At USD 78.7 billion, the Americas recorded the strongest quarter since 2022. As expected, the USA set the tone - primarily due to large investments in the AI industry.
• Asia: The Asian market reached a record low of USD 15.6 billion. Nevertheless, the region showed that cleantech and alternative energies remain attractive with flagship projects such as the USD 1.1 billion investment in CNNP Rich Energy.

In the fourth quarter of 2024, Germany experienced a sharp decline in venture capital investments, which fell to their lowest level in more than four years. This was not least due to economic uncertainties and the announcement of early elections. Large deals largely failed to materialise. The only exception was the 160 million US dollar financing for the Bavaria-based space start-up The Exploration Company, the largest deal of the quarter in Germany.

Despite the decline, some sectors remained attractive in Germany, including B2B companies focussing on operational efficiency, ESG reporting and semiconductor technology. However, the high price of capital and uncertainties meant that many start-ups had to accept venture debt or less favourable conditions. It is expected that the market could stabilise after the elections in February 2025.

A positive outlook for 2025 also results from the growing confidence in the IPO market. After a year of restraint, companies are beginning to position themselves for IPOs. In particular, the successful post-IPO performance of companies such as Reddit, with a share price increase of 240 per cent, has strengthened confidence in the future of IPOs.

Despite the ongoing geopolitical uncertainties, there is cautious optimism in the venture capital market. Especially after the US elections, the stabilisation of the political situation is expected to further strengthen confidence. 

You can download the latest Venture Pulse Report with the global and regional venture capital trends for the fourth quarter of 2024 now.