Global VC investment rises to five-quarter high of $94.3 billion in Q2’24 according to KPMG Private Enterprise’s Venture Pulse

Highlights:
Global VC deals volume drops to level not seen since Q3’16
VC investment rises to $58.3 billion in Americas and to $17.8 billion in Europe
9 companies raise $1 billion+ VC rounds, led by $8.6 billion CoreWeave raise in US
AI continues to dominate largest global investment during Q2’24

Global venture capital (VC) investment soared from US$75.4 billion to $94.3 billion between Q1’24 and Q2’24, fueled by nine $1 billion mega-deals—the second largest total ever seen in a single quarter. While VC investment rose to a five-quarter high, deals volume fell to 7,691—the lowest level seen globally since Q3’16. The low deal volume mirrors the ongoing challenges faced by the VC market, including the high interest rate environment and geopolitical uncertainties.

AI accounted for over half of the ten largest funding rounds globally during Q2’24 as VC investors continued to pour money into the space, according to the Q2’24 edition of KPMG Private Enterprise’s Venture Pulse— a quarterly report highlighting VC investment trends globally and in key regions around the world. These AI deals were led by a $8.6 billion raise by CoreWeave and a $6 billion raise by xAI—based in the US.

Regionally, VC investment increased in the Americas and Europe. The Americas saw VC investment climb to an eight-quarter high of $58.3 billion, while Europe experienced a rise from $13.9 billion to $17.8 billion. Conversely VC investment in Asia dipped to a seven-year low of $17.4 billion, largely driven by a continued slowdown in China even as VC investment rose in a number of other jurisdictions, including India, Singapore, and Japan.

Exit activity remained quite soft globally in Q2’24, although there were a few notable exceptions. In the US, cybersecurity firm Rubrik raised $752 million in its IPO, while marketing company Ibotta raised $577 million. UK-based budget computer company Raspberry Pi raised $211 million in the UK’s second largest IPO of the year.

AI is really propelling global VC investment right now. The bold promises being made in the AI space are quite audacious and offer a wealth of opportunities for AI applications across a variety of industries and operational activities Although AI is dominating investments this quarter, it’s not the only sector to thrive. Cleantech and alternative energy have continued to raise good funds as well.

Conor Moore

Global Head, KPMG Private Enterprise, KPMG International

Q2’24—Key Highlights

Global VC investment rose from $75.4 billion in Q1’24 to a five-quarter high of $94.3 billion in Q2’24.
Global VC deal volume fell from 9,082 deals in Q1’24 to 7,691 in Q2’24; it was the lowest total of deals seen since Q3’16.
VC investment in the Americas rose from $39.5 billion across 3,883 deals to $58.3 billion across 3,472 deals between Q1’24 and Q2’24; the US accounted for $55.6 billion of this total, spread across 3,108 deals.
VC investment in Europe rose from $13.9 billion across 2,270 deals in Q1’24 to $17.4 billion across 1,869 deals in Q2’24.
In Asia, VC investment remained soft, falling from $20.8 billion in Q1’24 to $17.4 billion in Q2’24—its lowest level since Q1’17.
Global Corporate VC participating investment rose from $36.2 billion to $41.1 billion between Q1’24 and Q2’24.
Both the Americas and Europe saw CVC participating investment rise—to $21.9 billion and $8.9 billion respectively; in Asia, CVC participating investment fell from $11 billion to $9.8 billion quarter-over-quarter

AI drives surge in global VC funding

AI helped drive a surge in VC funding globally during Q2’24, accounting for over 20% of all VC funding during the quarter. The US secured the largest share of this funding, led by a $8.6 billion raise by CoreWeave and a $6 billion raise by xAI—both LLM focused AI firms, a $1 billion raise by data-focused Scale AI, and a $1 billion raise by AI-powered biotech Xaira Therapeutics. UK-based AI-focused autonomous driving company Wayve also raised $1 billion during the quarter, while France-based LLM company Mistral AI raised $651 million and Germany-based AI translation company DeepL raised $300 million. In Asia, China-based Zunyuan Supermarket—an AI-powered retail company raised $529 million during the quarter, while generative AI focused Zhipu AI raised $400 million.

Energy and cleantech remain attractive to global investors

While AI was the clear winner in the global VC market during Q2’24, VC investment in energy and cleantech remained quite strong, with all jurisdictions attracting $100 million+ megadeals in the space. During the quarter, China-based electric vehicle manufacturer Neta Auto raised $693 million, US-based decarbonization-focused firm Nexamp raised $520 million, and UK-based long duration energy storage company Highview Power raised $382 million.

Americas attracts $58.3 billion in VC investment in Q2’24—its best quarter since Q2’22

The Americas attracted $58.3 billion in Q2’24—the highest level of VC investment it has seen since Q2’22. The US accounted for $55.6 billion of this total, including all the region’s largest deals. In addition to the large AI raises, the US saw e-cigarette company Juul raise $1.2 billion and cybersecurity firm Wiz raise $1 billion.

Outside of the US, VC investment picked up quite solidly in several jurisdictions during Q2’24. In Canada, VC investment rose from $783 million to $1.3 billion quarter-over-quarter, while in Brazil it rose from $353 million to $817 million, and in Mexico it rose from a very weak $38 million to $226 million.

Europe sees VC investment pick-up from $13.9 billion to $17.8 billion quarter-over-quarter

After falling to a fifteen-quarter low of $13.9 billion in Q1’24, VC investment in Europe rose to $17.8 billion in Q2’24. The UK accounted for $6.9 billion of this funding, including half of the region’s top ten largest deals: a $1 billion raise by autonomous driving platform Wayve, a $999.6 million raise by fintech Abound, a $621 million raise by neobank Monzo, a $382 million raise by Highview Power, and a $250 million raise by sustainable housing company HarperCrewe.

VC investment in Germany and France held nearly steady at $2.2 billion and $2.1 billion respectively, while it dipped slightly in the Nordics region from $1.5 billion to $1.4 billion. Investment in Austria rose dramatically from $43 million to $283 million quarter-over quarter, while Ireland saw investment rise from $151 million to $240 million.

VC investment in Asia drops to $17.4 billion, despite rising investment in Singapore, India, and Japan

VC investment in Asia dropped from $20.8 billion to $17.4 billion between Q1’24 and Q2’24, driven largely by a decline in VC investment from $13.5 billion to $6.9 billion in China. VC investment in other jurisdictions in the region saw solid increases. In India, VC investment rose from $2.9 billion to $4 billion, while in Singapore it rose from $1 billion to $2.6 billion, and in Japan it rose from $842 million to $1.1 billion.

Consumer e-commerce companies raised the largest rounds in Asia in Q2’24, with Singapore-based Lazada raising $1.9 billion and India-based Flipkart raising $1 billion. China-based EV manufacturer Neta Auto’s $693 million funding round came a relatively distant third.

A hint of optimism heading into Q3’24

Heading into Q3’24, VC investment globally is expected to remain relatively steady, with AI continuing to attract a large share of funding. Energy and cleantech are also expected to remain quite high on the radar of VC investors around the globe. The spate of larger deals could continue as VC funds face increasing pressure from their LPs to make investments. Fundraising activity by VC firms will likely remain very subdued until 2025. Once exit activity really picks up, fundraising will likely follow suit.

The IPO market will be interesting to watch in Q3’24, particularly in the US and Europe as there could be a brief window of opportunity for companies looking to exit But with the US presidential election slated for Q3’24, any real opening of the IPO market will likely hold off until the beginning of 2025.

Francois Chadwick

Partner, KPMG U.S.

For media queries, please contact:

Daniel Caines,
Senior Manager, Global External Communications, KPMG International

T: +44 7732400262
E: Daniel.Caines@kpmg.co.uk

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