Global VC Funding Settles Around $20B In February But AI Share Increases

Global venture capital funding reached $21.5 billion in February 2024 — flat month over month and slightly up from February 2023, Crunchbase data shows.

Globally, more than $2 billion was invested in seed-stage companies last month. Close to $10 billion was invested in early-stage companies. And venture investors spent $9.3 billion at late-stage, including technology growth companies.

The largest funding round in February went to 32-year-old North Carolina-based Epic Games. That was a $1.5 billion strategic investment in the Fortnite maker from Disney at a valuation of $22.5 billion, which was 30% lower than the $32 billion valuation set in a 2022 funding round for Epic.

The next largest funding went to a much younger company: Beijing-based AI startup Moonshot AI, which is just a year old. The large language foundation model company raised a $1 billion Series B funding at a $2.5 billion valuation led by strategic investor Alibaba and Sequoia Capital China.

AI sector captures large share of funding

Overall, AI companies captured a larger share of startup investment in February, Crunchbase data shows. More than a fifth of all venture funding in February went to AI companies, with $4.7 billion invested in the sector. That was up significantly from the $2.2 billion invested in AI companies in January 2024  and the $2.1 billion invested in February 2023.

Other large rounds in AI went to a number of Bay Area-based companies. Two-year-old humanoid robot company Figure raised $675 million at a $2.7 billion value and partnered with OpenAI. The slew of investors included Microsoft, OpenAI’s Startup Fund, Nvidia and Bezos Expeditions, among others.

Cloud-based GPU company Lambda and AI search company Glean also both raised large fundings, each north of $200 million.

AI optimism but also concern rise with sky-high valuations

The pandemic-led zero interest-rate policy funding climate is clearly in our rearview mirror. Global average monthly funding — which shot up in 2021 — has come down by 62% from that market peak.

Still, there are many concerns in venture capital circles that AI is the next bubble, as companies in this sector continue to raise massive rounds  in quick succession and at huge valuations.

However, if spending on software increases as companies see productivity gains from AI, the sector will expand in value.

In a recent interview with Crunchbase News, Dharmesh Thakker of Battery Ventures predicted the software spend of around $600 billion will increase twofold to threefold over the next five to seven years as AI delivers productivity gains and leads to GDP growth.

AI technologies have benefited from the past two decades of investment in semiconductor technology, the internet, cloud computing and hardware.

More to come.

Methodology

The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of March 5, 2024.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

Please note that all funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

As of January 2023, we have made a change to how we include corporate funding rounds in our reporting. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.

Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million.

Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)