VC Funding Slows in 2024 as Exit Drought Persists, AI Dominates: PitchBook-NVCA Venture Monitor
- Editor
- Jan 20
- 1 min read
What's New According to PitchBook-NVCA's Q4 2024 Venture Monitor, venture capital activity remained subdued with $209 billion invested across 15,260 deals in 2024, while exit values stayed low at $149.2 billion across 1,259 exits.
Why It Matters The ongoing liquidity drought is creating pressure across the venture ecosystem, particularly affecting emerging managers and later-stage companies, while AI investments emerge as a bright spot capturing 46.4% of total deal value.
Big Picture Drivers
AI Dominance: Large AI deals like Databricks, OpenAI, and Anthropic skewed overall investment figures, masking broader market slowdown
Exit Barrier: FTC's aggressive stance on M&A and challenging IPO conditions limited liquidity options
LP Hesitation: Limited partners remain cautious about new commitments amid low distribution rates
Capital Concentration: Established firms captured 79.4% of fundraising, leaving emerging managers struggling
By The Numbers
$76.1B: Total VC fundraising in 2024, down from $97.5B in 2023
508: Number of new VC funds raised, lowest in a decade
38.1%: Share of Corporate VC deals in AI companies during Q4
$307.8B: Total dry powder available across VC firms
Key Trends to Watch
Rate cuts in 2025 could improve exit environment and increase deal activity.
Potential changes at FTC under new administration may ease M&A restrictions.
Growing pressure on unicorn companies to find exit paths as median time since last funding reaches two years.
Emerging manager survival as first-time fundraising hits decade lows.
The Wrap While macro conditions show signs of improvement heading into 2025, the venture market faces a crucial period where increased exits and distributions will be necessary to restore healthy market dynamics and unlock new fundraising.
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