VC Investment Dips to $75.9 bn in Q1 Amid Exit Concerns

In the first quarter of 2024, global venture capital (VC) investment plummeted to $75.9 billion across 7,520 deals, a significant decline driven by persistent worries regarding geopolitical tensions, scarce exits in the market, and a noticeable reduction in investment during later deal stages, KPMG said in its report on VC funding.
Global VC Funding in Q1 2024 KPMG reportAmericas Lead VC Investment

The Americas emerged as the frontrunner in VC investment globally during Q1’24, attracting the largest share of funds with $38.2 billion dispersed across 3,205 deals. This surge was predominantly fueled by robust investment and deal activity in the United States, which amassed $36.6 billion across 2,882 deals. Notable investments included a $4 billion raise by Anthropic, $704 million by Ascend Elements, $675 million by Figure AI, $425 million by Areteia Therapeutics, and $400 million by Mirador Therapeutics.

Asia and Europe Follow Suit

Asia secured the second-highest level of VC investment in the quarter, totaling $18.9 billion across 2,305 deals. Noteworthy contributions came from China, which saw substantial raises such as $1.1 billion by IM Motors, $1 billion by YueZhiAnMian, and $940 million by Yuanxin Satellite. Meanwhile, Europe experienced a slight uptick in VC investment, reaching $17.9 billion across 1,798 deals. Key investments in the region included $5.2 billion raised by Sweden’s H2 Green Steel and $431 million by the UK’s Monzo.

AI Continues to Drive VC Investment

The momentum behind AI-driven solutions persisted in Q1’24, with several significant deals occurring in this domain. Notable transactions included Anthropic in the US, YueZhiAnMian in China, and Mistral AI in France, underscoring the enduring appeal of AI technologies to VC investors globally.

Corporate VC Investment Hits Five-Year Low

Corporate VC participation witnessed a decline, dropping from $40.8 billion in Q4’23 to $37.3 billion in Q1’24, marking its lowest level since Q3’19. Factors contributing to this decline include economic challenges prompting corporates to focus on core businesses and operational efficiencies. While the Americas saw a modest increase in CVC investment, Europe and Asia experienced decreases.

Trends to Monitor in Q2’24

As the world enters the second quarter of 2024, attention will be on the IPO market, with successful exits potentially influencing VC investment strategies. Additionally, small-scale M&A activity may rise as financially strained companies become targets for acquisitions or acquihires. AI is expected to remain a focal point for VC investors, particularly in industry-specific solutions. Cleantech investments are also anticipated to continue due to regulatory requirements and increasing ESG priorities. News Desk

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