Discussions of retail media networks (RMNs) and AI are picking up momentum among execs from retailers, agencies, and digital media companies: 

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Despite these declines, $100M+ mega-rounds comprised 51% of total CVC-backed funding in Q3’24, a notable increase from a quarterly average of 37% in 2023. Meanwhile, two-thirds of CVC deals this year have gone to early-stage companies, highlighting a strategic shift toward more emerging opportunities, especially in AI.

Based on our deep dive in the full report, here is the TL;DR on the state of CVC:

• ​​Global CVC-backed funding drops 5% to $15.7B in Q3’24. Nevertheless, that figure is still the second-highest quarterly level since the beginning of 2023. Meanwhile, a 10% QoQ decline to 773 deals — the lowest total since 2018 — suggests that CVCs are increasingly selective, similar to the wider venture market.

• The average CVC-backed deal size has increased 31% so far this year to $27.1M, highlighting investors’ willingness to take risks when they find the right opportunity. However, the median deal size remains the same as last year at $8M, signaling that investors are only more aggressive regarding the largest deals.

• Funding to CVC-backed mega-rounds (deals worth $100M+) represents 51% of total funding in Q3’24. This percentage — roughly in line with the first 2 quarters of 2024 — is up significantly from an average of 37% in 2023, further suggesting that investors are currently willing to make large bets when they decide to invest.
• Early-stage rounds represent 66% of total CVC deal share this year, the highest level in over a decade. CVCs are increasingly focused on early-stage startups, likely driven by the record levels of AI funding and the fact that, across investor types, 72% of deals to AI companies this year are early-stage.

• CVC-backed funding in the US ticks up to $10.5B. Among major global regions, the US continued to lead in CVC-backed funding in Q3’24, followed by Europe at $2.6B and Asia at $1.3B. Within the US, defense tech provider Anduril raised the largest CVC-backed deal with its $1.5B Series F round (CVC investors include Franklin Venture Partners), followed by AI chip developer Groq with its $640M Series D round (backed by Samsung Catalyst).

MORE VENTURE RESEARCH FROM CB INSIGHTS

• State of CVC Q2’24 Report
• State of Venture Q3’24 Report
• State of Fintech Q3’24 Report
• State of Digital Health Q3’24 Report

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While AI deals in Q3’24 included massive $1B+ rounds to defense tech provider Anduril and AI lab Safe Superintelligence, global AI funding actually dropped by 29% QoQ. This was driven by a 77% decline in funding from $1B+ AI rounds QoQ.

Based on our deep dive in the full report, here is the TL;DR on the state of AI:

• Global AI deal count climbs 24% QoQ to reach 1,245 — its highest quarterly level since peaking in Q1’22. This bucked the trend in overall venture deals (-10% QoQ), signaling that investor interest in AI remains strong despite the broader cooling in venture markets. AI funding, on the other hand, fell by 29% QoQ to $16.8B, driven by a 77% decline in funding from $1B+ AI rounds QoQ. 

• The average AI deal size is $23.5M in 2024 so far — up 28% vs. $18.4M in full-year 2023. This upward trend has been influenced by a rise in massive $1B+ deals, with AI startups drawing 9 of these deals in 2024 so far vs. 4 in full-year 2023. Top $1B+ rounds in 2024 YTD include: 
  • xAI — $6B Series B at a $24B valuation
  • Anthropic — $2.8B Series D at an $18.4B valuation
  • Anduril — $1.5B Series F at a $14B valuation
  • G42 — $1.5B investment from Microsoft
  • CoreWeave — $1.1B Series C at a $19B valuation

These deals aren’t solely responsible for pushing up the average — the median AI deal size is up 9% in 2024 so far.

• AI unicorn births more than double QoQ to reach 13 — 54% of the broader venture total in Q3’24. Generative AI continues to be a key theme for new unicorns (private companies reaching $1B+ valuations). More than half of the AI unicorns born in Q3’24 are genAI startups, and they are working across a variety of areas — including AI for 3D environments (World Labs), code generation (Codeium), and legal workflow automation (Harvey).

Among new genAI unicorns in Q3’24, Safe Superintelligence — co-founded by OpenAI co-founder Ilya Sutskever — landed the most sizable valuation. The AI lab was valued at $5B after raising a $1B Series A round in September 2024.

• AI M&A exits fall by 48% QoQ to hit 62 in Q3’24. The deals that did occur showcase how enterprises are strategically scooping up AI startups to improve their offerings and maintain a competitive edge. For example, the largest AI M&A deal in Q3’24 was AMD’s acquisition of AI lab Silo AI, which could help the semiconductor company enhance the development and deployment of AI models on its hardware. Meanwhile, Salesforce picked up unstructured data management startup Zoomin to support its AI agent offerings.

• Among major global regions, the US continues to lead in AI funding and deals. AI startups based in the US drew $11.4B across 566 deals in Q3’24, accounting for over two-thirds of global AI funding and 45% of global AI deals. Within the US, Silicon Valley still dominates AI funding and deals, but other metros are gaining ground. In Q3’24, Los Angeles and New York saw their AI deal counts rise QoQ while Silicon Valley watched its count drop for the second quarter straight.

ADDITIONAL AI RESEARCH FROM CB INSIGHTS:

• State of AI Q2’24 Report
• State of Venture Q3’24 Report
• Game Changers 2025: 9 technologies that will change the world
• The Multi-Agent AI Outlook: Here’s what you need to know about the next major development in genAI
• Analyzing a16z’s AI investment strategy: Where the firm sees opportunity amid the genAI rush
• The AI computing hardware market map

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Over the last month or so, JP Morgan has purchased 2 content/media assets. In early September 2021, it bought The Infatuation, a publisher that offers reviews and recommendations on restaurants in 50 cities across the USA and internationally. 

And later in the month, it bought Frank, an online portal with content and tools that help students research and apply for financial aid. (Note: In April 2023, Frank was accused of defrauding JPMorgan, inflating the number of Frank customers before the sale.)

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The post Stripe, HubSpot, And JP Morgan Are Buying Audiences. Why Acquiring Media Companies And Communities Is About To Explode appeared first on CB Insights Research.

Essential resources to understand the future of automotive, supply chain, & aerospace tech:

• How AI is reshaping the auto industry — A look at 15 high-momentum technologies across the automotive value chain.

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It’s driving value in both customer-facing experiences and back-end operations. This includes tackling challenges specific to digital retail, like personalizing product merchandising and forecasting inventory needs. 

While customer service has been the dominant focus so far, more advanced use cases are on the horizon. These include multi-application orchestration through solutions like composable AI, which helps synchronize genAI tools across an organization’s e-commerce tech stack. 

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B2B payments tools reach cross-functionally across companies, making it not only more essential, but also more complex, to efficiently integrate these tools into workflows.

To help strategy teams prioritize B2B payments tech markets in their planning decisions, we plotted markets across 2 dimensions:

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What you need to know:

Startups in the space have raised just over $350M across 21 deals YTD (as of 10/7/2024). This marks a big funding increase compared to prior years and has been driven almost entirely by early-stage activity. 

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The content below was curated by our experts using CBI Instant Insights, a one-click AI analysis and summarization tool. Click on company profiles for more details and sourcing information.

NOTABLE DEALS

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The post This month in genAI: Safe Superintelligence raises $1B, xAI launches AI cluster, Apple Intelligence unveiled appeared first on CB Insights Research.

The space is already seeing a steady stream of M&A activity, as established players seek to quickly acquire novel capabilities and fill in gaps in their AI talent.

But amid the frenzy, which specific genAI markets are most primed for exits — and what should corporate strategy and M&A teams be doing about it?

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In some ways venture has become less dramatic. The period of steep decline in funding that followed the dizzying heights of 2021 has given way to relatively moderate quarterly variations.

But even in a more sober fundraising environment, excitement over AI has become a major driving force for investors. One in every 3 VC dollars now goes to the tech. Silicon Valley, a major AI hub, is tightening its hold on investor cash. AI startups are exiting years faster than those working on other technologies.

As interest rates fall and the appetite for riskier assets increases, expect AI startups to be top of mind for an increasing number of investors in the months ahead.

Download the full report to access comprehensive data and charts on the evolving state of VC across sectors, geographies, and more.

Below, we cover key shifts in the landscape, including:

1. Quarterly declines in global VC funding and deals
2. AI startups grab 1 in 3 VC dollars
3. Performance from recent tech IPOs
4. Silicon Valley is only getting stronger
5. New unicorns remain rare
6. The US claims the bulk of AI innovation
7. How global VC stacks up against economic output
8. 76% of top deals go to B2B startups
9. AI startups exit 6 years sooner than the rest of tech

Let’s dive in.

Topline figures paint a sobering picture for venture, as both global funding and deals ticked down quarter-over-quarter (QoQ). The quarterly levels place Q3’24 on par with where VC was in 2016/2017.

However, while deal volume has progressively declined, the size of deals that do happen has grown. In 2024 so far, the average deal clocks in at $13.9M (up from $12M in full-year 2023), while the median is worth $3M (up from 2023’s $2.5M). 

The more cautious investment environment is likely driving a flight to quality as selective investors isolate the most promising ventures.

AI startups are capturing nearly a third (31%) of all venture funding right now — the second-highest share on record, following Q2’s 35%.

Within AI, a company’s age and stage don’t always correlate to the size of financing rounds. One of the largest rounds in Q3’24, for instance, was a mammoth $1B deal to Safe Superintelligence (SSI) — an early-stage startup founded in June by OpenAI co-founder Ilya Sutskever. The company has just 10 employees.

SSI’s deal is the 9th $1B+ AI equity round this year. Given their willingness to participate in such large rounds to so many companies, investors appear confident that a new tech giant will emerge from the space — and apparently have FOMO.

Yet despite investors’ bullishness, many of today’s fledgling AI startups will struggle to live up to lofty expectations, and some will ultimately fail. Even AI giants like OpenAI face the daunting task of keeping costs in control: the AI leader’s losses are expected to amount to $5B this year. 

The AI boom is also giving recent public debuts a boost. 

We analyzed 15 of the companies with the largest tech IPOs since 2022 to see whether they’ve gained or lost value since they filed to go public IPOs. The majority (10 out of 15) have either held steady or gained value as public players — a positive indicator for tech IPOs more broadly, which until recently were getting beaten down badly in the public markets. The fact that startups are able to maintain and even gain value as public companies will likely draw out other IPO-ready companies.

And AI is an important factor driving gains for several of these companies. For instance:

• Arm’s value has nearly tripled since it debuted late last year. The chip designer is a leader in CPUs for AI computing hardware, including providing the architecture for AI chip firms like Nvidia.
• Tempus is deploying AI across its precision medicine offerings, which has helped buoy its value by 31% since its IPO filing. (It legally changed its name from Tempus Labs to Tempus AI in early 2023.)
• Like Arm, Astera Labs, which offers AI infrastructure & connectivity hardware, has benefited from the swell in widespread adoption of AI. Its value has grown 45% since filing in March 2024. 

It’s not universal — enterprise AI firm 4Paradigm, for instance, has seen its value slashed by over half since debuting. But this could be due more to geopolitical forces, as China-based 4Paradigm has faced an uphill battle in sustaining investor interest because of US restrictions. (4Paradigm was placed on a US export control list in early 2023.) 

Customers: explore data behind these 15 IPOs

Another result of the AI explosion: Cash is concentrating in Silicon Valley, home to over a third of the US-based AI startups. In fact, the metro’s share of US venture funding — across sectors — has climbed to a recent high of 41% this year.

In Q3’24, Silicon Valley-based startups raised $10.5B — more than 2.5x that of New York ($3.9B), the second-ranked metro. LA and Boston follow, with $2.9B and $2.8B, respectively. 

Notably, deal activity in Silicon Valley remains overwhelmingly early-stage — meaning it’s not just a handful of more established startups raising massive rounds. More than two-thirds of Silicon Valley’s deals this year are at the seed or Series A stages.

See every AI company in Silicon Valley

Newly minted billion-dollar startups remain few and far between. Q3’24 saw 24 startups reach that mark — a noticeable bump from the previous quarter’s 16, though a fraction of what we saw during the tech boom of 2021 and early 2022. 

Valuations remain pressured at the later stages of investment, with many of the unicorns minted in years gone by likely worth less than $1B in reality. On the other hand, valuations are showing strength at the earlier stages. Among seed-stage startups, the median valuation for deals this year is $13.5M — the highest annual level on record.

There are a few common themes among the latest batch of new unicorns:

• AI is minting more unicorns than any other sector. More than half of the new unicorns in Q3’24 are AI companies. Among these, several are working to bring greater spatial awareness to AI systems, from Skild AI’s intelligent humanoid robotics to World Labs’ 3D world-building tools. Others are developing enterprise AI agents & copilots, like Harvey in the legal domain and Codeium in software engineering.
• India’s startups are climbing the ranks. The country contributed 3 of Q3’24’s new unicorns: Ather Energy, MoneyView, and Rapido. India ranks third globally for total unicorns after the US and China, and it had a strong funding quarter in Q3’24, with startups raising $4B — up 29% QoQ and 111% YoY.
• a16z and Sequoia are the most active investors in backing new unicorns. The investors each backed 4 of Q3’24’s freshly minted $1B+ companies. Andreessen Horowitz invested in Saronic Technologies, World Labs, Story Protocol, and Safe Superintelligence; while Sequoia Capital backed Skild AI, Harvey, Chainguard, and Safe Superintelligence.

See the 24 new unicorns with this search

CB Insights tracks over 15,000 AI startups globally. And while 99 countries and regions around the world have at least 1 AI startup, the US is the undisputed leader in AI startup activity — and by a substantial margin. 

43% of all AI startups are based in the country. The distant No. 2 and No. 3 countries are China (9% of AI startups) and the UK (7%). 

View 15,000+ AI startups in the Expert Collection

While the US has long dominated the global venture scene when it comes to absolute funding and deal activity, several countries rank above the US in terms of the ratio of venture funding to GDP: the United Arab Emirates, Israel, and Singapore. 

These 3 countries pace ahead of the US in terms of VC as a proportion of overall economic activity, suggesting they are punching above their weight in terms of fostering startup activity. 

For instance, UAE-based startups have raised over $3B in funding over the last year (since 10/1/2023), and the country’s 2023 GDP came in at $504B. That represents $1 in VC to $158 in GDP (1/158) — a stronger ratio than any other country with at least $1B in annual venture funding.

Activity in the region has recently been fueled by AI firm G42, which raised a $1.5B round from Microsoft in April. (As part of the deal, G42 will use Microsoft’s Azure cloud offering, and Microsoft will also gain access to G42’s data centers.)

Israel and Singapore hold the No. 2 and 3 spots, with venture funding to GDP ratios of 1/166 and 1/198, respectively. 

Explore top Q3 venture deals for the UAE, Israel, & Singapore

Right now, the venture capital industry is all in on B2B startups. Among the 100 largest deals in Q3’24, three-fourths went to startups that use a B2B business model (either exclusively or in combination with other models like B2C or B2G). 

The B2B distribution model — particularly at the enterprise level — has gained appeal in recent years as a potentially more stable, recurring source of revenue for startups, especially during periods of volatile consumer spending.

See the top B2B venture deals in Q3’24

The buzz around AI is translating to faster exit velocity for startups in the space. Breaking down all the exits that have taken place this year, it’s clear AI startups exit at a much faster rate — 6 years faster, to be exact. It takes the median AI company just 7 years to exit from the year it was founded, compared to 13 years for non-AI companies.

While this trend holds true for recent AI IPOs, it’s most commonly seen among M&A deals, which represent the vast majority of AI exits this year.

Corporations are among the top acquirers of AI startups, with many looking to gain an edge by rapidly adding novel AI tools to their product suites.

• Nvidia has acquired 3 AI startups this year: Deci and Run:ai, both in April; and OctoAI, just last week. All 3 operate at the infrastructure layer of AI development and signal Nvidia’s ambitions to expand across the AI software stack.
• Zendesk has acquired 2 customer service-focused players — Ultimate and Klaus — as it builds out its own AI agent offering to automate customer interactions.
• Salesforce has similarly pledged to go all in on AI agents. To this end, it acquired 2 AI startups last month: Tenyx and Zoomin.

Another driving factor is “acqui-hires,” where an acquirer purchases a startup primarily for its talent. We’ve seen this among some of the youngest AI startups to be acquired. For instance, SydeLabs and Laiyer, both founded in 2023, were acquired by Protect AI this year. In both cases, Protect AI absorbed the startups’ teams.

See the AI startups most likely to get acquired next

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Prefer to listen in? Check out our discussion of the report here: 

New breakthroughs are altering the future direction of tech and its influence on the world at large.

While AI has captured headlines, it’s just one part of a broader technological surge. Startups and tech giants alike are making strides in fields as diverse as clean energy, space exploration, and human longevity.

Our Game Changers 2025 report highlights 9 emerging technologies that could transform how we live, work, and interact with our environment over the next 5-10 years and beyond. 

These include:

• Ultra-deep drilling: Advanced drilling techniques that can go far deeper to unlock superhot rock energy
• AI agent marketplaces: Enabling dynamic integration and collaboration of specialized agents across software platforms 
• Quantum-optimized portfolios: Using quantum computing to build higher-performing portfolios, faster
• Cellular & epigenetic reprogramming: Altering the gene expression of cells to extend the healthy human lifespan
• GPS-less navigation systems: Approaches that boost the resiliency and accuracy of positioning services critical to global infrastructure

Download the full report to explore all 9 technologies and the data behind them — including drivers, startups, and implications — in detail.

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However, semiconductor manufacturing is immensely complex, extending across a vast value chain from the production of ultra-high-purity raw materials to chip design, assembly, and testing.

This complexity, coupled with geopolitical tensions, has made semiconductor manufacturing a focal point for national security and economic policy. Governments and industry leaders are racing to build more resilient supply chains to support critical technologies like high-performance computing and defense systems.

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What you need to know:

• Funding for AI agents has skyrocketed since 2022, driven by market leaders like Harvey and Luminance. 

• Differentiation will be important to watch — whether through added features, integration strategy, or core product. 

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Outside of costly content licensing deals, model developers and enterprises are turning to synthetic data — artificially generated datasets such as text and images — to supplement AI model training, especially in domains where data availability is limited or privacy is a concern. 

Since 2022, nearly 30 of 50 vendors identified in the synthetic training data space have raised equity funding. But overall funding has stalled as big tech eyes opportunities in the space — and as generative AI itself has upended the business models of data simulation companies founded prior to LLMs mainstream arrival. 

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Nvidia has used its experience developing graphics processing units (GPUs) — which were originally developed for applications like gaming but turned out to be rather good at AI tasks — to become a dominant force in AI infrastructure and applications. 

But a host of established companies and startups are investing heavily to capture a share of the growing AI computing market. This includes building new types of chips specifically for training and running AI models, evolving traditional processors like CPUs and GPUs to better support AI workloads, and exploring novel information processing technologies such as quantum and neuromorphic computing. 

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What you need to know: 

• The AI agent space remains nascent overall, but a growing cohort of startups has begun selling a product — suggesting the sector is poised for accelerated commercial growth in the months ahead.
• Investors like Y Combinator, OpenAI Startup Fund, and a16z are actively backing AI agent startups, with YC alone investing in 10+ companies in this space.

The future of the workforce is deeply entwined with AI — and enterprise AI agent startups, mostly early-stage, are rushing to seize the opportunity.

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In August 2024, we surveyed 50 corporate strategy leaders (at the Director-level or above) working at companies across major industries to identify key challenges they face in driving influence across their organizations and the approaches they use to address them.

Only 40% have clearly defined KPIs to measure their success and alignment issues appeared as the top pain point for strategic planning.

Download the full report to delve into the most common pain points faced by strategy teams, the tactics used by the most influential teams to improve strategic planning, and what challenges still remain unaddressed.

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What you need to know: 

• The OpenAI co-founder’s AI safety startup has raised $1B, reflecting the industry divide on AI risks — and the rush to back the next tech giant. 
• SSI’s deal marks the 9th $1B+ AI equity round of the year, following record levels of AI investment in Q2’24.

OpenAI co-founder Ilya Sutskever’s AI startup Safe Superintelligence (SSI) recently announced it had raised $1B at a $5B valuation. 

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Essential resources to understand the future of energy & climate tech:

• State of Climate Tech Q2’24 Report — Here’s where climate tech funding is going and where we’re seeing pockets of interest.

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