After two years of a slowdown in enterprise capital funding, growth from large funding rounds and AI funding signaled a stronger quarter in Q2.
There are also signs that energetic enterprise capitalists who pulled back from their 2021 volume peaks are picking up the pace a bit.
However, despite a slight recovery, the overall funding outlook has not modified as founders proceed to face high fundraising requirements at every stage.
Global financing peaked last 12 months
Global funding rose in Q2 to $79 billion, the highest in five quarters. The increase was largely driven by mega-stage rounds of $100 million and more—a show of confidence in late-stage growth-oriented corporations—alongside a competitive surge in AI investment.
Enhanced Artificial Intelligence
While a growing number of investors have expressed concerns about the revenues generated by AI in comparison with huge investment outlaysAI funding surged in the latest quarter. AI sector funding doubled to $24 billion, the highest in 18 months, led by $1 billion in funding xAI, Weave Core, Way, AI scales AND Xair Therapy.
Khosla Headlines
Some of the most high-profile investors have picked up the pace 12 months over 12 months to take the lead after the seed round. Khosla’s ventures, Acceleration AND Andreessen Horowitz led more post-seed rounds. Growth and private equity investors are noticeably absent, with numbers significantly lower than in 2022.
North America breaks records
U.S. and Canadian startups had their highest quarter of funding since Q1 of last 12 months. Funding reached $45.3 billion, up greater than a third 12 months over 12 months, based on an evaluation of Crunchbase data. AI funding in the latest quarter greater than doubled quarter over quarter and 12 months over 12 months, to $16.8 billion, in line with global trends.
Asia was limping
Funding flows into Asia recorded their worst quarter since 2015. Across the region, startups raised $14.6 billion, down 32% from a 12 months earlier.
The percentage of AI startup funding was lower than in other regions, at $2.5 billion — lower than 20% of total funding last quarter — and significantly lower than the $16.8 billion raised by startups in North America.
Late Stage Strengthening in Europe
Europe beat Asia in quarterly funding for the first time in a decade, based on Crunchbase data evaluation. European startup funding reached $16 billion, with a surge in late-stage funding alongside large rounds for AI corporations.
Latin America is subject to fluctuations
Funding for South and Central American startups is significantly lower than the peak of Q2 2021. Funding reached $791 million in South and Central America, with startups from Brazil and Mexico receiving the largest share of funding, with fintech leading the region.
Methodology
The data in this report comes directly from Crunchbase and is based on reported data. Reported data is as of July 7, 2024.
It is vital to keep in mind that data lags are most noticeable in the earliest stages of a enterprise’s life, and seed funding amounts increase significantly after the end of the quarter/12 months.
Please note that each one funding values are reported in US dollars unless otherwise noted. Crunchbase converts foreign currency to US dollars at the prevailing spot rate from the date that funding rounds, acquisitions, IPOs, and other financing events are reported. Even if these events are added to Crunchbase well after the event is announced, foreign currency transactions are converted at the historical spot price.
Glossary of financing terms
As of January 2023, we have made a change to how we account for corporate funding rounds in our reporting. Corporate rounds are only included if the company has raised seed equity funding through a series enterprise funding round.
Seed and angel consist of seed, pre-seed, and angel rounds. Crunchbase also includes undisclosed enterprise rounds, equity crowdfunding, and convertible bonds of $3 million (USD or USD equivalent after conversion) or less.
Early stage includes Series A and Series B rounds, in addition to other types of rounds. Crunchbase includes unspecified enterprise, corporate enterprise, and other rounds above $3 million and those lower than or equal to $15 million.
Late stage includes Series C, Series D, Series E and later enterprise rounds after “Series [Letter]” naming convention. Also included are enterprise rounds of unknown series, corporate ventures, and other rounds above $15 million.
Technology Development is a round of private capital raised by a company that has previously raised funds in a enterprise round. (Basically any round from the previously defined stages.)