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Vibrancy has returned to the venture capital market for innovation. VC-backed companies raised US$42.9 billion in Q2 2024, representing a 29-percent increase from the US$33.3 billion raised in Q1 2024. More crucially, it marked the second consecutive quarter of growth following a year of decline.
AI-related companies accounted for 37 percent of total VC funding in Q2 2024, with a single deal topping US$6 billion. Within generative AI, foundation and large language models attracted the highest share of funding due to their capital-intensive nature.
Fueled by the strong performance of AI-related companies, information technology (IT) accounted for nearly 50 per cent of all funding in Q2 2024. Consumer services and healthcare are on track to surpass their annual total amount raised in 2023. Moreover, one of the top healthcare deals this quarter was AI-driven, raising US$1 billion in Q2 2024.
Apart from AI, more VC investors recognise the power of Web3 as an increasing number of developers build decentralised applications, or dApps, and crypto bounces back. The sector has matured from a developing community to a budding industry, which will continue to grow and receive more attention from investors.
VC funding for Web3 startups is stabilising after a year-long decline in 2023, with crypto ventures securing some US$2 billion in financing in Q2 2024. The first half of 2024 reversed the downtrend in Web3’s quarterly VC funding. In July 2024, VC investments in Web3 startups topped US$1 billion across 118 deals. As the market experiences more liquidity and investors regain confidence in the crypto ecosystem, new ways of raising capital are emerging. Optimism has returned as a decentralised internet becomes more established.
Experts believe that the Federal Reserve’s interest rate cuts in the United States will stimulate the global economy and the start-up ecosystem.
Meanwhile, growth in China is expected to accelerate…
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