Global Tech Startup Funding Declines Sharply in Q3 2024, Lowest Since 2020
According to the latest Global State of Funding report by CB Insights, the third quarter (Q3) of 2024 saw a significant downturn in funding across the tech ecosystem.
Between July and September, startups raised $54.7 billion, marking a steep 19.7% decline from the $68.1 billion raised in Q2 2024. This also represented an 11.8% drop from the $62 billion raised in Q1 of the same year, making Q3 2024 the lowest funding quarter since 2020, even lower than the $54.9 billion recorded in Q4 2023.
Decline in Deals and Investment Activity
The report highlights a sharp reduction in the number of funding deals, with only 6,056 deals recorded in Q3, down from 6,736 in Q2 and 7,209 in Q1. This is the lowest deal count since 2020 and falls below the previous low of 7,201 deals in Q4 2023.
Regional Funding Breakdown
The United States led the way in Q3 2024, with U.S. startups raising $29.8 billion, accounting for 55.1% of the global total. Europe followed, raising $11 billion (20.1%), and Asia secured $10.5 billion (19.2%). Other regions saw much smaller shares, with Latin America raising $800 million (1.46%), Oceania (Australia and New Zealand) securing $500 million (0.9%), and Africa attracting just $300 million, a mere 0.54% of the total funding. Other regions raised $94 million combined.
Resilience in Large Deals
Despite the overall downturn, there were 98 deals worth $100 million or more in Q3 2024, an increase from 85 similar deals in Q4 2023. These large deals raised a total of $21.5 billion, surpassing the $18.9 billion raised by such deals in late 2023.
2024 on Track for Lowest Funding Since 2020
With $184.8 billion raised so far in 2024, the year is poised to be the slowest funding year since 2020. This figure falls $76.6 billion short of the $261.4 billion raised in 2023. With Q4 2024 unlikely to see a significant recovery, it is improbable that the year’s total will match or exceed last year’s funding.
In conclusion, while Q3 2024 showed some resilience in large deal sizes, the broader funding landscape remains challenging, with significant declines in both investment volumes and deal activity across the global tech startup ecosystem.
