Startup Funding Regained Its Footing In 2024 As AI Became The Star Of The Show
Global venture funding in 2024 edged above 2023’s totals, with AI showing the biggest leap in amounts year to year. Overall startup funding in 2024 reached close to $314 billion — compared to $304 billion in 2023 — up around 3%, based on an analysis of Crunchbase data.
Global venture investment in 2024 was above the pre-pandemic year of 2019, but below 2018 and 2020 amounts at $346 billion and $350 billion, respectively.
Breakout year for AI
One thing was clear: 2024 was the breakout year for funding to AI companies.
Close to a third of all global venture funding went to companies in AI-related fields, making artificial intelligence the leading sector for funding. Funding to AI-related companies reached over $100 billion — up more than 80% year over year from $55.6 billion in 2023 — Crunchbase data shows. Funding to the AI sector in 2024 surpassed every year in the past decade, including the peak global funding year of 2021.
Of those AI dollars, almost a third of all AI funding went to foundation model companies.
The other two-thirds of funding went to sectors impacted by these new models. Infrastructure and data provisioning to manage and operate AI grew. Other leading sectors included autonomous driving, healthcare, robotics, professional services, security and military, Crunchbase data shows.
Q4 push
The higher total in 2024 was due to a big push in Q4 — which saw the highest funding total since the downturn in Q3 2022. The fourth quarter reached $93 billion, up 36% year over year from $69 billion in Q4 2023 , based on an analysis of Crunchbase data.
In recent years, Q4 was typically slower. The 2024 fourth quarter, however, closed with the largest rounds raised this year — $22 billion by three companies.
Large values, billion-dollar rounds
In 2024, a greater share of funding went to billion-dollar rounds, in large part driven by funding to the AI sector. In 2024, $58.3 billion — or 19% of all funding — went to billion-dollar rounds. Compare that with 2023, when $45.8 billion — or 15% of funding — went to rounds of a billion dollars or more.
The fourth quarter picked up steam with the largest valuations achieved last year. OpenAI was awarded a $157 billion valuation. Databricks was valued at $62 billion in the year’s largest venture deal, a $10 billion round. And xAI doubled its valuation in a six-month period, to $50 billion.
Not surprisingly, the largest funding rounds this past year went to companies in the AI sector — not only Databricks, OpenAI and xAI, but also Waymo and Anthropic raised funding of at least $4 billion — or much more.
Other large valuations to companies in AI went to CoreWeave ($19 billion), Anthropic ($18.4 billion), Anduril Industries ($14 billion), Scale AI ($13.8 billion) and Perplexity ($9 billion).
Read the full article: https://news.crunchbase.com/venture/global-funding-data-analysis-ai-eoy-2024/
