Venture funding in the third quarter of 2024 reached $66.5 billion globally. This marks a 16% decrease from the previous quarter and a 15% decline from the same period last year. The total has dipped below $70 billion for only the second time since the downturn began nine or ten quarters ago.
Despite the overall decline, the numbers for Q3 2024 don’t necessarily indicate a worsening trend. Large funding rounds have varied significantly from quarter to quarter over the past two years. The most significant drop was in late-stage funding, particularly in rounds of $500 million and above.
In Q3, about 46% of venture dollars went to rounds of $100 million or more. This is slightly less than the 50% seen in Q2 and Q3 of last year. AI led all sectors in Q3 funding, attracting nearly $19 billion.
This represents 28% of all venture dollars invested. Healthcare and biotech raised over $15 billion, followed by hardware with more than $13 billion.
Q3 funding trends and sector highlights
Financial services companies secured close to $8 billion. Late-stage funding totaled $34.7 billion, showing no change from the previous quarter but a decrease from $46 billion in Q3 2023. The reduction in deals of $500 million and above was the most notable difference.
Early-stage funding reached $24.7 billion in Q3, down from the previous quarter due to a substantial $6 billion Series B funding in Q2 that skewed the numbers upward. Year over year, early-stage funding remained flat. Seed funding was $7 billion, down both quarter over quarter and year over year.
About $6.8 billion was in rounds of $1 million and above, distributed across more than 1,500 companies globally. Year-to-date, venture funding is down around 7% compared to last year. Seed funding is flat year over year but will likely increase as more rounds are reported.
Early-stage funding is up around 10%, while late-stage funding has declined by approximately 20%. The overall venture funding landscape appears steady year over year. However, fewer venture funds in 2024 suggest potential challenges ahead, especially at the earliest funding stages.
