The global venture capital (VC) investment market in the fourth quarter of 2024 grew by 33% compared to a year ago, thanks to large-scale investments in the AI (artificial intelligence) sector, primarily in the United States.
The global accounting and consulting corporations KPMG announced on the 6th that it has published the 'Venture Pulse Q4′24' report, containing this information.
According to the report, the global VC investment amount in the fourth quarter of 2024 was identified as $108.6 billion (approximately 157.1 trillion won). This is the highest level in ten quarters. In particular, 6 out of 8 'mega deals' worth over $1 billion were concentrated on AI-related corporations, including AI models, application solutions, and infrastructure.
Despite uncertainties such as global geopolitical conflicts, high interest rates, and major country elections, the annual global VC market in 2024 recorded a 5% increase compared to the previous year, reaching $368.3 billion. VC investors prefer late-stage corporations that can secure profitability based on stable business models, and the number of investments in the fourth quarter of 2024 fell to 7,022, a 31% decrease compared to the same period last year.
The global VC exit market in 2024 remained sluggish at $318.4 billion across 2,719 cases. This is due to ongoing high interest rates and political and economic uncertainties, which have contracted the IPO market in the U.S. and other regions. As the scale of exits through IPOs decreased, mergers and acquisitions (M&A) have become a major exit strategy.
KPMG noted, "Although uncertainties due to former President Trump's second term still exist, as election-related variables are resolved and the trend of major countries reducing interest rates continues, the IPO (initial public offering) market is expected to recover in 2025 along with improvements in the global VC market."
Looking at VC investments by region, while investments in Europe and Asia decreased in the fourth quarter of 2024, large-scale investments in AI were concentrated in the United States, making U.S.-led VC investments prominent. The five mega deals, including data and AI corporations such as Databricks ($10 billion), OpenAI ($6.6 billion), xAI ($6 billion), Waymo ($5.6 billion), and Anthropic ($4 billion), were all conducted with U.S. AI corporations.
In Europe, despite regulatory tightening such as the enactment of the EU (European Union) AI Act, investments related to AI continued. Investments in AI infrastructure and various industries, including biotech and space tech, have actively continued, with notable investments in the U.K. data center corporation Greenscale ($1.3 billion), Turkey's AI marketing platform Insider ($500 million), Finland's smart ring developer Oura ($200 million), and radar satellite imaging technology corporation IceEye ($160 million).
In contrast, VC investments in the Asia-Pacific region recorded $12.8 billion (1,977 cases) in the fourth quarter of 2024, the lowest level on a quarterly basis. China's VC investment scale sharply declined from $10.3 billion in the third quarter of 2024 to $5.8 billion in the fourth quarter. However, investments have been made in alternative energy, autonomous driving, and data centers, including China National Nuclear Power Company's ($1.1 billion) and Didi Chuxing's subsidiary Didi Chuxing Autonomous Driving's ($298 million).
India's VC investment scale also contracted to $2.6 billion in the fourth quarter, but several startups, including fintech corporation Pine Labs and eyewear brand Lenskart, backed by SoftBank, have been pushing for IPOs over the past 18 months, raising expectations for the recovery of the IPO market and expansion of VC investment in 2025.
Jung Do-young, a partner at Samjeong KPMG's startup support center, stated, "AI is expected to be the leading VC investment area in the first quarter of 2025," adding, "Investments in AI solution corporations that are applied in various industries such as biotech, robotics, cybersecurity, defense tech, and autonomous driving will expand."
He further added, "The launch of the Chinese AI startup 'DeepSeek' has broken the conventional view that large capital is needed for AI model development, and competition for AI development among domestic and foreign startups is expected to intensify, increasing the likelihood of expanded investments by corporations and VCs."