Q3’24 Venture Pulse Report

VC investment in Asia fell for the fifth consecutive quarter, driven by a slowdown in deals activity and the absence of $1 billion+ megadeals within the region. Philippine-based fintech Mynt’s $788 million raise accounted for the largest deal in Asia during Q3’24, followed by a $688 million raise by China-based Baichuan AI, and large raises by two semiconductor manufacturers – China-based ICLeague ($415 million) and Singapore-based Silicon Box ($363 million). The top 5 deals were rounded out by a $360 million raise by India-based quick e-commerce company Zepto.

VC investment in China remains soft in Q3’24

VC investment in China was relatively quiet in Q3’24, although a number of sectors continued to attract large deals. AI remained a key area of investment, with core AI developers continuing to attract the largest funding rounds, including LLM-focused Baichuan AI ($688 million) and Moonshot AI ($300 million). The advanced semiconductor space also saw a number of $100 million+ funding rounds, including a $415 million raise by ICLeague and a $138 million raise by Semidrive Technology.

VC investors in China also continued to show interest in the health and biotech space; during Q23’24, tumor immunity and microenvironment therapy firm LaNova Medicines raised $44 million, vaccine technology developer Maxvax Heath raised $41 million, microbe-based product developer Moon Biotech raised $41 million, and clinical stage therapeutics company AusperBio raised $37 million.

India bucks global trend with significant raises by consumer-focused businesses

VC investment in India was very solid in Q3’24, driven in part by large VC raises by consumer-focused startups, including quick delivery company Zepto ($360 million), hotel-booking company OYO Rooms ($349 million), and edtech company PhysicsWallah ($210 million). Other big deals included beauty-focused online marketplace Purplle ($120 million), and eyewear retailer Lenskart ($100 million). The large raises by B2C businesses in India was an incredibly unique trend, the opposite of trends seen in most other jurisdictions in Asia and in other regions of the world — where B2B companies attracted the greatest levels of VC investment. Outside of the consumer retail space, two and three wheel electric vehicle and components manufacturer Omega Seiki Mobility also raised $150 million during Q3’24.

Despite economic challenges, Japan continues to attract VC investment

VC investment in Japan was quite strong in Q3’24, despite challenging market conditions, including turbulence in Japan’s stock markets and the possibility of additional interest rate increases. While VC investors continued to hold back from making late stage investments, seed and early-stage funding continued at a good pace during the quarter, likely helped by large scale support from the government.

Generative AI firm Sakana AI attracted Japan’s largest deal of Q3’24 — a $200 million Series A raise,¹ followed by cloud HR management firm SmartHR — which raised $135 million, and flying cargo drone and car developer SkyDrive, which raised $95 million. Biotech also attracted a number of raises this quarter, including a $37 million raise by drug discovery company Renalys and a $30 million raise by ThinkCyte.

Trends to watch for in Q4’24

Heading into Q4’24, VC investment in China is expected to remain relatively subdued, with the exception of government priority sectors like AI and semiconductors. In India, however, there is very strong optimism that the VC market is recovering and that the next few quarters could see the level of VC investment really start to climb. Despite some economic challenges, VC investment in Japan is expected to remain steady in Q4’24, with AI, deeptech, and biotech continuing to attract significant attention from VC investors.