NXTGEN

VC TRENDS: 2024 IN REVIEW

Global VC funding is back up, but deal volume is at its lowest. We’re seeing less and less early stage startups funded.

 11 minutes

This brief analysis looks at total deal value and deal volume across the venture landscape for the 2024 calendar year. The KPMG Venture Pulse Report is an in-depth report, a copy of which can be downloaded here. This analysis represents our own commentary notes based on this report.

In Q4 2024, global VC investment saw a significant increase in deal value (up to $108.6 billion), reaching a ten-quarter high, primarily driven by mega-deals in the AI sector. The KPMG report notes that the Americas saw $78.7 billion raised across 3,178 deals, with the US leading due to AI-focused rounds like Databricks’ $10 billion deal. For the full calendar year, total global deal value topped $368.3 billion (2023: $349.5 billion). Deal volume however has remained low globally, dropping 17% to 35,686 (2023: 43,320).

Total deal value is up 5%, but deal volume is down 17%, with early stage deal volume at an all-time low.

Whilst late stage funding deal volume has remained fairly constant, early stage deal volume is at an all-time low. 

Early stage includes pre-seed/seed and Early VC (Series A and B), and by volume it is the worst it has been for at least the last seven years, including since the pandemic.

It’s a tough environment for the earliest of founders.

Regional Breakdown: Americas, Europe, Asia, and Others

The Regional Breakdown Reveals Stark Disparities:

  • The Americas: Led by the US, VC investment rose to a ten-quarter high in Q4 2024, with $78.7 billion raised across 3,178 deals, driven by AI mega-deals like Databricks’ ($10 billion), OpenAI ($6.6 billion) and xAI ($6 billion). Over the full year, $209B was raised in the US and $7.3 billion in Canada.
  • Europe: VC investment activity seems to have stabilized, but the annual total financing raised for 2024 ($62.3 billion) fell short of 2023 ($67.5 billion). The biggest contributors were the UK, leading with $19.4 billion, followed by France ($8.8 billion) and Germany ($8.5 billion).
  • Asia: Asian startup ecosystems continue to see a steady decline in the tally of completed financings per quarter, with the total value raised at $79 billion for the year. Notably, China’s venture financing is down 67% to $38 billion (2023: $63.7B), with contributions from India ($15.3 billion) and Japan $5.3 billion.

Lets Drill-Down into Africa, Latin America, and Southeast Asia

Africa:

  • African startups raised $3.2 billion in 2024, a 7% decrease from 2023, with Nigeria, South Africa, Egypt, and Kenya dominating at 67% of equity funding, down from 79% in 2023, showing resilience despite challenges.
  • While Kenya topped the financing list (primarily due to debt financing), Nigeria is considered the front runner with the highest equity dollar value ($520M) and deal count (103), followed by South Africa ($459M over 67 deals), Egypt ($297M; 89 deals) and Kenya ($221M; 59 deals).
  • Fintech continued to dominate Africa’s tech ecosystem securing $1.65B of total financing, approximately 51% of total funding.

LATIN AMERICA: Latin America (LatAm) includes Mexico, Central America, South America and the Caribbean (excluding Puerto Rico and other overseas territories and departments).

 

  • Latin America: $4.5 billion was raised in 2024, representing an 8% increase from 2023. A strong Q4, led by fintech, assisted in stabilizing previous years’ declines.
  • Regional powerhouses: Brazil and Mexico-based startups attracted 70% of VC dollars invested in Latin America in 2024.
  • Deal volume was down 9% on the prior year with 751 deals concluded in 2024, primarily driven by local investor participation in seed and early stage rounds.
  • Fintech continues to attract the most VC dollars securing $2.8B, approximately 61% of total financing.

SOUTHEAST ASIA: The Association of Southeast Asian Nations (ASEAN) refers to the 10 member countries including Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

  • The ecosystem has been recognised as one of the fastest growing and most promising regions for entrepreneurial activity globally, with venture funding peaking at $26 billion in 2021.
  • Southeast Asia: $6.4 billion was raised in 2024 across the ASEAN markets with Singapore dominating with $4.36 billion (68%) across 413 deals. There were a total of 687 deals across Southeast Asia, with nearly 96% of all deals in the early stage.
  • There has been a massive fallout in VC funding into the region since Q4’22. At its peak, Southeast Asia raised $25.97 billion in 2021 (across 996 deals), followed by $18.54 billion in 2022 (1078 deals) before slumping to $8.56 billion in 2023 (746 deals). It is worth noting that only 21 late stage deals were concluded in 2024 (2023: 58 deals) and down nearly 82% from its high in 2021 (114 deals).
  • Fintech remains the biggest sector attracting equity funding (36.8%), followed by e-commerce (9.0%) and software and IT (7.9%).

Analysis of Pre-money valuations, deal sizes and equity dilution by Series

Below is a summary of pre-money valuations, deal sizes (both in USD) and equity dilution per series for each of the main regions, plus a drill down into more specific regions.

From reviewing this, here are a few standouts:

  • Whilst Angel and Pre-seed deal sizes are fairly homogeneous across regions ($0.3M-$0.8M), there is far less equity dilution for Americas companies. With European and Asian investors’ higher risk profile, founders dilute between 1.4x and 2.5x more than America’s founders.
  • There’s a big divergence that starts at Seed stage deals: Americas startups will raise more than 2x their Asian counterparts, with America’s founders diluting 28% less, and 1.6x more than Europeans whilst also diluting 39% less in equity. The disparities are best seen in their respective Enterprise Values (being pre-money valuation plus deal size): Americas ($16.7M); Europe ($7.6M) and Asia ($6.1M).
  • Series A, B and C rounds show a continual slip for founders, especially in Europe. Although deal sizes are somewhat consistent across regions (cf. rounds between Americas and Europe: $12M to $11M; $28M to $29.8M; and $45M to $43.3M) the equity dilution continues to worsen between 1.3x and 1.7x for European founders. At the more mature stage (series D) the EV’s level out at $905.6M (Europe) and $887.5M (Americas), but at this stage the European CEO founders have typically been diluted to ~7% whereas Americas founders maintain ~13% equity (assuming no employee pool top ups or stock options)

The U.S is the best place to raise funding. American CEO founders are 2x better off across deal size, dilution and enterprise values than European founders.

Analysis of Africa, LatAm and Southeast Asian median deal sizes 

Below is a compilation of median deal sizes (USD) per series for some of the emerging markets. It is difficult to gather complete data including median pre-money valuation and dilution % ‘s by series.

From reviewing median deal sizes, here are a few standouts:

  • Seed stage investment into SEA is driven off the back of a mature capital market ecosystem in Singapore, which alone accounts for 68% of investment activity in the region. 
  • Seed stage deal sizes in LatAm ($0.5M) and Africa ($1.6M) are driven almost entirely by local investors, and are therefore priced down on average deal sizes in more mature markets.
  • Series A deal size in Africa is down 18% YoY to $5.8M, and series B down 27% YoY to $13.8M, both likely driven by fewer U.S. investor participation in rounds, as indicative of deal volume for series B deals down 35% YoY.
  • There are very few late stage VC deals (Series C +) across emerging markets: Africa, 14 deals; LatAm, 9 deals and SEA, 21 deals (down 68% YoY).