Global enterprise capital investment rose to $368.5 billion in 2024, up 5.4% from $349.4 billion the previous yr, in response to the primary have a look at the study Q4 2024 Pitchbook-NVCA Venture Monitor Report.
But the number of world deals fell 17% to 35,686 in 2024, in comparison with 43,320 the previous yr in 2023. The share of AI deals in total deals increased over the yr, as you’ll be able to see within the chart below.
Global deals in 2024 fell 50.9% in comparison with $751.5 billion in the height yr of 2021, and the variety of deals in 2021 is down 37% from 57,068.
AI deals now play a giant role. There were 8,343 AI deals worldwide in 2024, down 3.6% from 8,661 in 2023 and down 16.6% from 10,007 in 2021.
The value of those global AI deals was $131.5 billion in 2024, up 52% from $86.3 billion in 2023 and down 6% from $140.2 billion. dollars in 2021.
AI and machine learning accounted for 35.7% of world business value in 2024, up from 24.7% in 2023. And AI and machine learning accounted for 23.4% of world business value in 2024, up from 20% in 2023 . In 2021, AI accounted for 18.7% of world deal value and 17.5% of world deal count.
Global figures for the 4th quarter
On a worldwide level, the Asia-Pacific enterprise capital market has struggled within the fourth quarter in recent times, which has not modified in 2024, said Kyle Stanford, senior VC analyst at Pitchbook.
Compared to Europe and the US, the quantity of dry powder gathered in various markets in APAC was much lower, putting further pressure on deals last yr. China, which accounts for around half of annual deal activity for APAC, has seen a big decline in activity because of each economic challenges within the country and tensions with the US government, which is restricting activities within the US resident corporations has restricted corporations. Only 20.4% of deals were made in Asia, the bottom proportion within the last decade.
Globally, AI continues to dominate headlines and investors' investment focus, although some note that investment activity will not be sustainable in the long run. Whether that is true or not is trivial at this time moment.
Just over half of all VC investments globally within the fourth quarter went to an AI-focused company. It's true that this amount was heavily influenced by OpenAI, Databricks, xAI and other well-known corporations paying for stock buybacks and investments in chips and computing power needs, but a very powerful factor is the extent of capital availability for AI in comparison with other sectors said Stanford.
The share of all deals going to AI corporations has risen steadily in recent times as large corporations and investors alike seek to capitalize on the expected efficiencies of the subsequent wave of technology, he said.
“VC-backed exits haven’t historically been particularly strong within the APAC region, although many markets are still too young to develop a healthy exit environment,” he said. “The lack of exits in lots of regions has left many foreign investors weary of increased activity through the market slowdown. Japan has been an outlier by way of numbers, as many IPOs within the country have helped boost investor returns. In 2024, 19% of world VC-backed exits got here from Asia-based corporations.”
Global fundraising was slow, with recent commitments down just over 20% year-on-year. The lack of exits had a serious impact on Asia fundraising as LPs were less inclined to re-commit at this point. 2024 marked the bottom yr for brand spanking new commitments since 2018 and was the bottom yr for closed-end funds available in the market within the last decade. North America and Europe also struggled to secure recent commitments to enterprise funds.
US deals within the 4th quarter
According to Pitchbook and the NVCA, U.S. dealmaking remained relatively robust from a counting perspective within the fourth quarter of 2024, increasing barely by 3.7% yr over yr. In the quarter, AI deals accounted for nearly half (46.4%) of total U.S. deal value.
Stanford said it appears to contradict the market narrative of recent years, but is indicative of a holdover of certain risk mechanisms from a number of years ago.
“What has happened is that the excess of dry powder from 2021 and 2022 with high fundraising has kept many investors energetic available in the market despite a scarcity of returns,” Stanford said. “Given the slow fundraising years of 2023 and 2024, this relative resilience is more likely to deteriorate as funds have exhausted their available capital and are unable to lift one other fund.”
Artificial intelligence continues to be the story of the market, bringing in almost the vast majority of VC dollars in 2024, he said. OpenAI, xAI, Anthropic and others have grow to be synonymous with outsized enterprise deals and seem like operating in a special funding environment than most VC-backed corporations, which proceed to struggle with lower capital availability, Stanford said.
But the dearth of exits stays the story of the enterprise market, even when the outlook is more hopeful, he said. Only $149.2 billion in exit value was created in 2024, most of which got here from a handful of IPOs. Unicorns, which hold about two-thirds of the U.S. VC market value, have asserted themselves as private corporations and put pressure on investors and limited partners by missing distributions.
Mergers and acquisitions remained “quiet” in 2024, with few large deals, Stanford said. A more acquisition-friendly environment in 2025 could set the stage for a renewed M&A market, particularly if a soft landing for the economy could be fully achieved, he said.
In the US, fundraising was dominated by large, established firms. 30 corporations accounted for greater than 68% of total fundraising value in 2024. This is a trend that has been developing in recent times but reached a peak last yr, Stanford said.
Many of the emerging managers who raised money within the VC market through the ZIRP-era boom have been unable to generate returns and their portfolios have been troubled by the valuation changes which have occurred because the market has shifted. Without a track record to talk of, many firms face a really difficult market to draw recent commitments from LPs, Stanford said.
European VC market
In Europe, the worth of VC deals reflected a slight decline, while the variety of deals fell about 16% year-on-year, Pitchbook analyst Nalin Patel said, because of a more cautious environment in 2024.
European deal activity was down in earlier funding stages, across most sectors and in several regions, as a tougher funding market emerged.
He said AI brought just over 1 / 4 of transaction value to the region in 2024, with just over 23% of accomplished financings. The large, outsized deals related to other enterprise markets didn’t occur in the identical volume in Europe, so the share of deal value remained according to the number.
And he said the exit value increased in 2024, largely because of Puif's listing. Otherwise, it was a quiet yr for European VC-backed exits, particularly by way of listings, as corporations avoided exits.
“We expect exits to extend in 2025 as market conditions improve,” Patel said.
Capital raised by European-based VC funds remained flat in 2024 in comparison with the previous yr and remained below the height set in 2022. The variety of funds also fell in 2024, falling by a couple of fifth in comparison with 2023. Larger funds were closed in 2024.
The view?
One technique to see how much dry powder the industry has and whether VCs themselves are successful is to take a look at how well they’ve managed to lift money themselves. The news here looks pretty bleak, or a minimum of corrected now in comparison with the overhyped days of 2021.
In 2024, 1,344 funds raised capital, down from 2,333 in 2023 and a record 4,283 in 2021. In terms of capital raised, the 1,344 VCs raised $169.7 billion in 2024, down from $213.8 billion US dollars in 2023 and lower than the record $404.4 billion in 2021.
