Conor Moore<\/a> Global Head, KPMG Private Enterprise, KPMG International. “But even within AI, a lot of deals were somewhat smaller than we’ve seen in recent quarters. This reflects somewhat of a trend in investors shifting their focus from core AI companies focused on LLMs (Large Language Models) and the like to companies with highly targeted industry solutions. Defense-tech was also a big winner in this quarter, in addition to biotech.”\n<\/p>\nQ3’24\u2014Key Highlights <\/b>\n<\/p>\n
Global VC investment dropped from $95.5 billion in Q2’24 to $70.1 billion in Q3’24; the number of VC deals dropped from 9,270 to 7,227 over the same period.\n<\/p>\n
VC investment in the Americas dropped from $58.6 billion in Q2’24 to $41.4 billion in Q3’24\u2014including from $55.5 billion to $37.5 billion in the US; in Asia, VC investment dropped from $18.5 billion to $15.6 billion, while in Europe it dropped from $17.9 billion to $12.5 billion.\n<\/p>\n
Global corporate VC investment fell from $54 billion to $35.2 billion between Q2’24 and Q3’24; this included declines from $34.4 billion to $19.6 billion in the Americas\u2014including from $32.7 to $17.8 billion in the US\u2014from $10.7 to $9.4 billion in Asia, and from $8.5 billion to $5.9 billion in Europe.\n<\/p>\n
Global exit value dropped from $52.9 billion in Q2’24 to $39.2 billion in Q3’24.\n<\/p>\n
Exit activity in Asia rose from $11.2 billion to $18.2 billion quarter-over-quarter, while it fell from $25.4 billion to $11.2 billion in the Americas, and from $16.3 billion to $9.8 billion in Europe.\n<\/p>\n
Global fundraising activity was well off the pace needed to match even 2023’s subdued total of $202.8 billion; at the end of Q3’24, global fundraising stood at $143.1 billion.\n<\/p>\n
AI sector sees six of the top ten deals globally in Q3’24, including largest deal in every key region<\/b>\n<\/p>\n
While VC investment could be considered low in all regions of the world this quarter, AI continued to garner a lot of interest in Q3’24. Six of the ten largest deals during the quarter were AI focused, including a $1.5 billion raise from US-based Anduril Industries, a $1 billion raise by US-based Safe Superintelligence, a $688 million raise by China’s Baichuan AI, a $$640 million raise by US-based Groq, a $500 million raise by Canada-based Cohere, and a $483 million raise by Germany-based Helsing.\n<\/p>\n
While core AI firms continued to attract VC investments during Q3’24, including Safe Superintelligence, Baichuan AI, and China-based Moonshot AI ($300 million), VC investors also showed very strong interest in AI-driven industry solutions. In particular, AI-powered defense-tech companies raised large rounds in Q3’24, including Anduril Industries and Helsing. China also saw AutoAI, which enables automotive companies to embed AI into their vehicles, raise $107 million.\n<\/p>\n
Americas attracts $41.4 billion in VC investment in Q3’24; investment in Canada more than doubles <\/b>\n<\/p>\n
VC investment in the Americas fell from $58.6 billion across 4,104 deals in Q2’24 to $41.4 billion across 3,124 deals in Q3’24. The US accounted for a large majority of this total\u2014$37.5 billion across 2,794 deals. AI was by far the biggest ticket in the US\u2014accounting for the only two $1 billion+ deals in Q3’24 globally. Life sciences also attracted large deals, including a $370 million raise by autoimmune disease focused Candid Therapeutics, a $350 million raise by weight loss drug company Metsara, and a $325 million raise by programable cell cancer therapies company ArsenalBio.\n<\/p>\n
Canada had an excellent quarter of VC investment in Q3’24, the total more than doubling from $1.2 billion to $2.7 billion quarter-over-quarter, led by a $900 million raise by legaltech Clio and a $500 million raise GenAI-focused Cohere. The Q3’24 total represented a ten-quarter high for Canada. In Brazil, VC investment dropped from $878 million to $473 million between Q2’24 and Q4’24, while in Mexico it dropped from $415 million to $358 million.\n<\/p>\n
VC investment falls to four-year low in Europe\u2014only Germany sees VC investment grow<\/b>\n<\/p>\n
VC investment in Europe plummeted from $17.9 billion in Q2’24 to a level not seen since Q2’20 ($12.5 billion) in Q3’24. Despite continuing to attract the largest share of VC funding in the region, the UK saw VC investment drop from $7.1 billion to $3.4 billion quarter-over-quarter.\n<\/p>\n
Germany was the only major jurisdiction in Europe to see VC investment increase\u2014from $2 billion to $2.4 billion between Q2’24 and Q3’24. Germany also accounted three of Europe’s five largest deals during Q3’24, including a $483 million raise by AI-enabled defense-tech Helsing, a $278 million raise by satellite launch services company Isar Aerospace, and a $200 million raise by smart workout solution firm EGYM. Raises by France-based mobile games maker Voodoo ($385 million) and UK-based open payments firm Form3 ($$220 million) rounded out the top five.\n<\/p>\n
VC investment in Asia-Pacific falls; Japan bucks trend with a twelve-quarter high<\/b>\n<\/p>\n
VC investment in Asia dropped to a seven-year low of $15.6 million in Q3’24, driven by the continued slowdown in sizes and declining deal values; the largest raises in Q3’24 included a $788 million raise by Philippines-based Globe Fintech Innovation, a $688 million raise by Baichuan AI and a $415 million raise by semiconductor company ICLeague\u2014both in China, and a $362 million raise by Singapore-based semiconductor firm Silicon box.\n<\/p>\n
China continued to attract the largest share of VC investment in the region ($6.1 billion), although it was the lowest quarter of investment China has seen in over ten years. Despite a decline in Q3’24, VC investment in India remained solid at $3.6 billion, helped by a number of raises by consumer-focused businesses, including a $360 million raise by quick delivery company Zepto. VC investment in Japan bucked the downward trend, rising to a twelve-quarter high of $1.8 billion in Q3’24, driven by a ten-quarter high of deals volume (356), including a $214 million raise by Sakana AI.\n<\/p>\n
Waiting game heading into Q4’24, but all eyes on 2025<\/b>\n<\/p>\n
With the US election looming large on the global stage heading into Q4’24, VC investment will likely remain subdued for most of the quarter as investors take a wait-and-see approach until the results are decided. AI will likely remain a hot area of investment, in addition to defense-tech given ongoing global geopolitical tensions.\n<\/p>\n
There is a growing sense of optimism that exit activity is readying for a rebound, which would be very beneficial for the VC market globally heading into 2025. “We’ve had a long dry spell on the exit front globally, but market conditions are improving,” said Francois Chadwick, Partner, KPMG in the U.S.. “With interest rates dropping, M&A will likely start ticking up because acquisitions are becoming more viable. And while IPO activity will likely remain slow through Q4’24 due to the US election, all eyes will be on the IPO market heading into 2025.”\n<\/p>\n
Hashtag: <\/b>#KPMG<\/p>\n
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