The past quarter was a quirky one for North America startup funding, with a slowdown in some pockets counterbalanced by continued high enthusiasm around artificial intelligence, Crunchbase data shows.

Overall, the number and size of funding rounds to North American startups slowed sequentially in the third quarter based on reported investments. However, the tallies did not include an enormous $6.6 billion financing for OpenAI that was widely reported in Q3 but only officially announced this week.

In total, investors put $40.5 billion into startups across all stages in Q3. That’s a decline of 10% from the prior quarter and an increase of 22% from year-ago levels. Late-stage dealmaking showed the largest gains, while early-stage funding posted the steepest sequential decline.

For perspective, we charted investment totals, color-coded by stage, for the past 11 quarters below.

Investments were also spread across fewer deals. Known round counts across all stages totaled around 2,065 for the quarter — down both sequentially and year over year.

Table of Contents

• A big quarter for AI
• Exits and an overview
• Late stage
• Early stage
• Seed stage
• M&A
• IPOs
• The big picture
• Related reading
• Methodology
• Glossary of funding terms

A big quarter for AI

Investors’ appetite for artificial intelligence deals stayed strong in Q3, with nearly $15 billion invested in the space in North America alone.

That’s a bit below the prior quarter’s tally, but would have been much higher had OpenAI announced its latest financing just a few days earlier. Below, we chart out how investment in AI-related startups compared over the past seven quarters.

Exits and an overview

Beyond big rounds, the just-ended quarter also provided a few good-sized exits.

While the IPO market wasn’t especially active, we did see a handful of public offerings, predominantly in the biotech sector. There were also some large acquisitions for startups focused on enterprise software, cybersecurity and other areas.

Below, we break down how investment trended at each stage. We also look at the largest exits for the quarter, including both M&A and IPOs.

Late stage

We’ll start with late stage, which, as usual, took in the largest share of funding.

A total of $23.8 billion went to late-stage and technology growth deals in Q3 of 2024. That’s an increase of 28% from the prior quarter and 19% from year-ago levels.

Round counts totaled 246. That was up a bit from the prior quarter, and roughly flat with Q3 of 2023. Below, we chart both round counts and total investment for late-stage and technology growth deals over the past five quarters.

The rise in total investment was largely due to a single deal — Alphabet’s $5 billion July investment in autonomous driving spinoff Waymo. But since that was categorized as a corporate investment rather than a venture capital round, it doesn’t serve as a strong indicator of the broader venture funding climate.

We did, however, also see some more traditional, large late-stage venture rounds in Q3. Top among them was defense tech startup Anduril’s $1.5 billion Series F in August. Additionally, Vancouver-based legal tools platform Clio locked up a $900 million Series F at a $3 billion valuation.

Other big deals included: AI chip company Groq, which landed a $640 million Series D; cell therapy developer ArsenalBio, which secured $325 million in Series C financing; and AI coding startup Magic, which picked up a $320 million Series C.

Early stage

Early-stage investment declined some in Q3, with $13.5 billion in total funding, per Crunchbase data. That’s a decline of 39% from the prior quarter and roughly flat with year-ago levels. Round counts, meanwhile, were down slightly.

For a bigger picture view we chart out total early-stage investment and round counts for the past five quarters below.

It should be noted that Q2’s high early-stage tally was largely due to a single $6.4 billion round for Elon Musk’s artificial intelligence startup, xAI. Without that deal, the Q3 decline would have been much less pronounced.

Meanwhile, Q3 included a number of large early-stage deals. The largest such round by a long shot was a $1 billion September financing for Safe Superintelligence, an AI research lab co-founded by former OpenAI chief scientist Ilya Sutskever. The round reportedly valued the Palo Alto, California-based company at $5 billion.

Other big rounds included a $370 million September Series A for San Diego-based Candid Therapeutics, a developer of therapies for autoimmune diseases, and a $300 million July Series A for Pittsburgh-based Skild AI, a developer of software to power robots.

Overall, there were 17 early-stage rounds of $100 million or more in Q3, a majority of which went to biotech startups.

Seed stage

Seed investment declined some in Q3, with $3.3 billion invested across nearly 1,207 known rounds. We expect round counts to rise in coming months, however, as more deals are entered into the database.

Overall, Q3 investment totals were the lowest in years. Below, we charted out how round counts and investment totals compared over the past five quarters.

M&A

We saw a few large acquisitions announced during the quarter in sectors from cybersecurity to biotech. Standouts include:

• Mastercard agreed to acquire Recorded Future, a threat intelligence provider, from Insight Partners for $2.65 billion.
• Salesforce 1 agreed to acquire Own Company, a provider of data management tools, in a deal valued at around $1.9 billion.
• Drug discovery company Nerio Therapeutics was acquired by German pharmaceutical company Boehringer Ingelheim in a deal valued at $1.3 billion.
• Cloud data storage company Nasuni sold a majority stake to private equity acquirers at a valuation of $1.2 billion. Vista Equity Partners was lead investor, with participation from KKR and TCV.

IPOs

The third quarter was a slow period for technology IPOs, but we did see some biotech debuts, including:

• Bicara Therapeutics, a developer of cancer therapies, went public in September at an initial valuation of $881 million.
• Zenas BioPharma, a developer of immunology-based therapies, went public on Nasdaq in September and had a recent market cap around $740 million.
• BioAge Labs, a developer of treatments for metabolic diseases based on the biology of human aging, went public in late September and had a recent market cap around $675 million.

The big picture

Overall, as we look back at Q3, the adjective “unusual” comes to mind as more descriptive than the usual terms like “bullish” or “bearish.”

Venture investors aren’t exactly down on the asset class, but they have pulled back on once-popular themes like consumer products, e-commerce and the so-called legacy cloud. But the AI engine keeps revving, and investor dollars continue to pile up for hot names in the space.

The exit environment isn’t especially buzzy, but large-ticket M&A deals haven’t dried up entirely, particularly for more established startups with breakthrough technology or steady revenue. And while the tech IPO market remains largely dormant, there’s still talk of a pickup in the latter half of 2025. That isn’t terribly distant for the venture exit horizon.

• Anduril Industries Valued At $14B After $1.5B Series F
• Legal Tech Startup Clio Raises Whopping $900M At $3B Valuation
• AI Coding Is Ultra Hot, With Magic And Codeium Revealing Big Rounds This Week
• xAI Makes It Official — Raises $6B At $24B Valuation
• AI’s Big Day — Startup Safe Superintelligence Raises $1B At Reported $5B Valuation
• Mastercard Buys Insight Partners’ Recorded Future For $2.65B

Methodology

The data contained in this report comes directly from Crunchbase, and is based on reported data. Data is as of Oct 2, 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

We have made a change to how we include corporate funding rounds in our reporting as of January 2023. 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.)

Illustration: Dom Guzman