Global Venture Capital Outlook: The Latest Trends

After a challenging year, global venture capital funding roared back in the final quarter of 2024, jumping up by 24% quarter over quarter. Total investment reached approximately $120 billion across 4,000 deals.

The US held its dominant position as major generative AI players secured outsized rounds, reinforcing the region’s sector leadership. Europe also gained momentum, particularly in biotech, financial services, and AI. The European Commission’s five-year plan to simplify regulations and accelerate investments played a crucial role in attracting capital. Conversely, hampered by geopolitical uncertainty, China's sustained slowdown, and weak exit opportunities, Asia-Pacific recorded its lowest quarterly funding levels since 2019. However, government-backed electric vehicle and clean tech investments were bright spots, reflecting a shift in capital allocation.

Average deal sizes climbed across all stages, fueled largely by generative AI. Investors also poured capital into high-potential sectors, such as data centers, clean energy, robotics, and biotech, with early-stage deals averaging $25 million.

The number of corporate and corporate venture capital (CVC) deals dipped slightly in the fourth quarter, primarily due to a fall in overall deal count. But corporate- and CVC-backed deals still accounted for 35% of total deal value, the highest share since 2019.

Within the generative AI space, investors’ interest in AI models and infrastructure continues to rise. In the fourth quarter of 2024, development tools saw the greatest quarterly growth and some of the highest funding, second only to foundation and large language models. In 2025, investors will likely prioritize solutions that support long-term innovation and market stability.

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