Last quarter was a great quarter for AI startup founders looking for funding — perhaps.
Such startups raised more cash than ever before in the second quarter, raising a staggering $24.2 billion across 1,001 deals, according to Crunchbase data. data. This is greater than twice as much as was raised in the first quarter by similar startups, and about twice as much as in the same quarter last 12 months.
Thanks to a huge influx of cash in the second quarter, AI startups saw $35.6 billion invested in the first half of this 12 months — a 24% increase from $28.7 billion in the first half of last 12 months.
While the sheer size of the dollar amount is eye-catching — and it’s the largest amount ever raised by an AI startup in a single quarter — what could also be most interesting is the actual variety of deals.
The just over 1,000 deals announced in the last quarter were the lowest variety of financing rounds for AI startups in years.
However, what this quarter lacked in volume was greater than made up for in big deals.
Of course, the biggest ones include: Elon Muska startup dealing with generative artificial intelligence, xAIofficially announcing its long-awaited $6 billion fundraising, Weave Core $1.1 billion freeze at $19 billion valuation and London-based self-driving automobile startup Way$1.05 billion raised through SoftBank– was led in a circle.
AI startups raised 34 nine-figure funding rounds last quarter — up greater than a third from just 22 rounds in the first quarter and up from 27 rounds of $100 million or more in the second quarter of last 12 months.
Big deal(s)
In addition, there have been five financing rounds of $1 billion or more in the second quarter — AI scales and AI biotech company Xair Therapy in addition to those above. There was only one such round in the first quarter — a Chinese AI startup Moonshot AI — while last 12 months in the second quarter there was only a similar AI Variation raise $1 billion or more.
These massive increases pushed the dollar value to unprecedented levels at the same time as transaction volume was down 15% from the first quarter and 26% from a 12 months earlier.
AI investing has been a tough sell. Coming into the 12 months, many enterprise capitalists were predicting a slight decline as valuations seemed frothy and the financial metrics of many AI firms didn’t align with what investors were now looking for—namely revenue and positive money flow.
But that could be why we’re seeing more cash going to fewer AI startups. Investors could also be betting big — really big, in many cases — on ones they imagine in, while those they’re less confident about disappear at earlier stages of funding.
We actually talked about this recently as early stage funding seemed to be declining. Now that the quarter is over, these numbers are becoming more visible as we will see how mega rounds have added up to a huge sum.
If you’re the head of an AI startup, it would look like a good time to seek funding, but more and more investors seem to be betting less — but more — money.
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Rounds raised by AI-powered startups
xAI Makes It Official — Raises $6 Billion at a $24 Billion Valuation
AI cloud infrastructure startup CoreWeave raises massive latest funding round at reported valuation of $19 billion
British self-driving automobile maker Wayve boosts sales with $1 billion funding round led by SoftBank
Early AI funding may show some cracks