TLDR:
US venture capital funding reached a 2-year high of $55.6 billion in Q2 2024, with a 47% increase from the previous quarter, driven by significant investments in AI companies. The excitement around AI technology, especially after the launch of OpenAI’s ChatGPT chatbot, has fueled this surge.
- US venture capital funding rose to $55.6 billion in Q2 2024.
- 47% increase from the previous quarter, largely due to investments in AI companies.
According to PitchBook data, the hope for significant returns from AI adoption has led investors to make substantial bets on startups. After a decline in VC funding, the recent influx of capital into AI startups has reversed the trend. However, exits remain challenging, and emerging VC fund managers might feel the pressure of a lack of proven returns. Despite the increase in deal activity, small deals generated lower exit values compared to the previous quarter.
The IPO market has struggled to gain momentum, impacting VC returns. Large tech companies must list publicly at a higher pace to drive returns. Andreessen Horowitz closed new funds with over $7 billion, indicating dominance in fundraising among large firms.
