While total late-stage investment has risen in the past few years, less is going to smaller deals. Funding to late-stage rounds of $30 million and under has been particularly weak, declining for six years in a row, per Crunchbase data.

Now, it’s circling a low. In 2025, U.S. investment in these smaller rounds at Series C and beyond totaled just $1.36 billion across just 69 rounds. That’s less than 2% of all investments at later stage.

For the first few weeks of 2026, the decline in smaller late-stage rounds looks much sharper. So far this year, they’ve accounted for about 0.2% of all late-stage funding, a record low.

Wandering down later-stage memory lane

The small share of funding going to sub-$30 million rounds may not sound surprising to those following recent giant financings. After all, these are the glory days of generative AI, where the $40 billion round is an actual thing.

But it wasn’t that long ago that smaller late-stage rounds were a big part of the startup pipeline. Back in 2016, more than half of later-stage rounds were below $30 million. Such rounds accounted for more than a sixth of all investment at that stage.

Last year, by contrast, sub-$30 million late-stage rounds were just 16% of all deals and 1.6% of all investment at that stage.

Only room for big fish

What happened? It looks similar to the trends we’ve seen at seed. Once largely populated with rounds of a couple million dollars, seed now regularly features deals of over $100 million. Yes, smaller rounds are still getting done, but they’re not where the asset class is concentrating its capital.

One simple explanation across stages is that investors are increasingly in consensus about who they see as the likely big winners. They’re putting their money behind a few standouts rather than spreading their bets. It’s a reasonable approach for a world where top public companies are valued in the trillions, and few smaller venture-backed companies even make it to the public markets.

A constrained environment for some core acquirers might also be a contributing factor. In the past, the idea of selling to a tech giant might have been a viable option for a non-unicorn. These days, concerns around antitrust scrutiny and other factors have led large-caps to pull back on smaller deals, with the five largest tech companies in particular showing scant appetite for small-scale M&A.

Private equity is also a less interested acquirer lately, as higher borrowing costs make debt-financed purchases costlier. Venture-backed startups are typically not throwing off a lot of cash flow, making them a poor contributor to servicing debt.

Bottom line, there aren’t as many clear paths to the good-but-not-phenomenal type of exit a later-stage startup could realistically envision. Yes, startups are still buying other startups, but these are often smaller purchases.

The preeminent use case for a smaller late-stage round may have more to do with the company itself than exit prospects. Some companies may not need that much to get to their next milestone. Yet without any fresh capital, they’re unlikely to get there at all.

This also sounds a lot like real life. But these days, the startup funding world is resembling that less and less.

Related Crunchbase query:

Related reading:

• A Growing Share Of Seed And Series A Funding Is Going To Giant Rounds
• The Big 5 Still Aren’t Buying Many Startups
• Why More Startups Are Buying Other Startups In 2025

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Global venture investment in 2024 was above the pre-pandemic year of 2019, but below 2018 and 2020 amounts at $346 billion and $350 billion, respectively.

Table of Contents

• Breakout year for AI
• Q4 push
• Large values, billion-dollar rounds
• US gained, Silicon Valley fired up
• Late-stage Q4 boom
• Early stage flat
• Seed settled
• Liquidity hold-up
• Methodology
• Glossary of funding terms
• Related reading

Breakout year for AI

One thing was clear: 2024 was the breakout year for funding to AI companies.

Close to a third of all global venture funding went to companies in AI-related fields, making artificial intelligence the leading sector for funding. Funding to AI-related companies reached over $100 billion — up more than 80% year over year from $55.6 billion in 2023 —��Crunchbase data shows. Funding to the AI sector in 2024 surpassed every year in the past decade, including the peak global funding year of 2021.

Of those AI dollars, almost a third of all AI funding went to foundation model companies.

The other two-thirds of funding went to sectors impacted by these new models. Infrastructure and data provisioning to manage and operate AI grew. Other leading sectors included autonomous driving, healthcare, robotics, professional services, security and military, Crunchbase data shows.

Q4 push

The higher total in 2024 was due to a big push in Q4 — which saw the highest funding total since the downturn in Q3 2022. The fourth quarter reached $93 billion, up 36% year over year from $69 billion in Q4 2023 , based on an analysis of Crunchbase data.

In recent years, Q4 was typically slower. The 2024 fourth quarter, however, closed with the largest rounds raised this year — $22 billion by three companies.

Large values, billion-dollar rounds

In 2024, a greater share of funding went to billion-dollar rounds, in large part driven by funding to the AI sector. In 2024, $58.3 billion — or 19% of all funding — went to billion-dollar rounds. Compare that with 2023, when $45.8 billion — or 15% of funding — went to rounds of a billion dollars or more.

The fourth quarter picked up steam with the largest valuations achieved last year. was awarded a $157 billion valuation. was valued at $62 billion in the year’s largest venture deal, a $10 billion round. And doubled its valuation in a six-month period, to $50 billion.

Not surprisingly, the largest funding rounds this past year went to companies in the AI sector — not only Databricks, OpenAI and xAI, but also and raised funding of at least $4 billion — or much more.

Other large valuations to companies in AI went to ($19 billion), Anthropic ($18.4 billion), ($14 billion), ($13.8 billion) and ($9 billion).

US gained, Silicon Valley fired up

Venture funding to U.S. companies totaled $178 billion — around 57% of total global funding. The U.S. funding market raised a greater proportion of global funding, up from 48% in 2023.

Of all U.S. funding, $90 billion was invested in the corridors of the San Francisco Bay Area, which experienced a boom from AI investing. Compare that with 2023, when Bay Area companies raised $59 billion in total funding.

Late-stage Q4 boom

Late-stage funding in the fourth quarter reached $61 billion, up more than 70% quarter over quarter and an increase year over year from the $36 billion invested in Q4 2023, Crunchbase data shows. The biggest change in Q4 from a year earlier was the increase in billion-dollar rounds. Large fundings were raised in multiple sectors such as AI, applied AI, energy, semiconductor, banking, security and aerospace, among others.

Early stage flat

Early-stage funding was flat in Q4. Large early-stage rounds went to data centers, renewable energy, AI, robotics and biotech.

Seed settled

Seed funding trailed in Q4, for now. Reaching $7 billion in Q4, seed funding was down 16% from the $8.4 billion invested a year ago. (However seed fundings are often added to the Crunchbase dataset after the close of a quarter, and should increase over time.)

Liquidity hold-up

It was a slow year for exits in 2024.

M&A activity was slightly up compared to 2023 — but slower than expected and somewhat concentrated in biotechnology and cybersecurity companies.

Of the magnificent seven,, and hired AI teams from , and , respectively, as the regulatory environment impeded strategic dealmaking. was the most active acquirer in 2024 among this cohort.

The IPO market — also slow in 2024 — ended on a positive note with the unexpected bump from the IPO, which as of the new year is above its IPO price by more than 40%.

An opening up of the IPO markets in 2025 will drive LP allocation to venture, said , a partner at Sapphire Partners, in an interview. “History just shows very clearly that when there’s positive liquidity, more money goes into venture funds,” she said.

Methodology

The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of Jan. 3, 2025.

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

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. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.

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.)

Related reading

• OpenAI Raises $6.6B At $157B Valuation
• Databricks Raises $10B In 2024’s Largest Venture Funding Deal
• The 10 Biggest Rounds Of November: xAI And Anthropic Raise Billions Again
• AI Cloud Infrastructure Startup CoreWeave Raises Huge New Round At Reported $19B Valuation
• Anduril Industries Valued At $14B After $1.5B Series F
• Scale AI Raises $1B In Accel-Led Round; Hits $13.8B Valuation
• SpaceX Shooting For $750M Round At $137B Valuation — Report
• Forecast: 2024 Was Slow For Tech IPOs, But 2025 Could Be Different
• What We Learned About AI From 7 Active Startup Investors This Year

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For Q1 2023, the operative word is down: funding is down, deal flow is down, overseas investment is down. The only soaring numbers in the first quarter are those displayed in our Crunchbase Tech Layoffs Tracker.

As for how we all got here, there are plenty of factors to choose from — rising interest rates, tumbling tech stocks, a war in Ukraine, weakening valuations, a stalled IPO pipeline, and let’s not forget . Now the question is: Has VC funding hit bottom, or do round sizes and deal counts have further to fall? We dive deeper into this year’s first-quarter numbers to find out.

The pain continues

The downward march of VC funding numbers that began in Q1 2022 and accelerated in the third quarter continues to drag on into the current year. Global VC funding fell 53% year over year in Q1 2023 to $76 billion — and that’s counting two mighty lifts by and , which each raised billions in recent months. Even early-stage numbers dropped as investors continue to hoard their record levels of dry powder.��

Nowhere to hide

Sometimes in a down market, certain regions will enjoy a surge due to local factors or investment in a particularly strong sector.��

But there was nowhere to hide in first-quarter 2023. The only region to show a real uptick in venture funding was North America, and that was likely due to the OpenAI and Stripe multibillion-dollar deals. North American funding in the first quarter reached $46.3 billion — a decline of 46% from the same period last year. And without those two large deals, Q1 venture funding would have been down even more dramatically, with a more than 60% decline from the same period last year.

Latin America hardest hit

Latin America was impacted by the downturn more than any other region in first-quarter 2023, year over year. Venture investment in Q1 was down 84% from the year-ago quarter, per Crunchbase data. That puts Central and South America, which just over a year ago ranked as the fastest-growing startup investment region in the world, on the short list for the fastest shrinking.

Active investors in the region have cut back sharply this year, such as , which participated in 34 rounds in 2021 and 2022. The firm joined just two rounds this year. Jumbo-sized rounds of $100 million and up are also apparently a thing of the past, with a single venture round of $100 million or more closed in Q1. Late stage, early stage, seed — they all struggled to raise funding.

Europe’s U.S. investors pull back

European startups raised $10.6 billion in funding in Q1, down 18% quarter over quarter and a whopping 66% year over year, as American investors pulled back.��

Seed funding saw a dramatic 25% collapse last quarter — a signal that VCs aren’t big on making long-term commitments right now. While late-stage startups experienced the worst funding pullback year over year, early-stage funding performed the best of the three stages (though funding was still down 7%).

The pullback by U.S. venture firms landed a telling blow on the region. Not only are deal counts the lowest they’ve been in a three-year period, Europe’s first-quarter funding is the lowest the continent has seen since Q1 2020, when the region garnered $9.9 billion.

Asia funding falls in biggest markets

Venture funding in Asia also got off to a brutal start in 2023, declining 33% from the previous quarter and a massive 57% from the first quarter of last year. Total venture funding in the region fell to $15.2 billion — the lowest in at least the past three years.

As in other regions, late-stage and growth rounds suffered the most, both in terms of dollars and percentage. Late-stage and growth rounds only saw $7 billion in investment — a 64% drop from Q1 2022, which saw $19.7 billion. Seed and angel funding rounds also weakened, with the first quarter this year seeing only $1.4 billion raised in 723 rounds.��

Downturn shakes up investor ranks

In such a reeling and volatile market, it’s no wonder that the ranks of the most active global venture investors were shaken up in Q1 2023.

�� and rose to the top of our list as past VC leaders such as and didn’t even crack the top 20. The quarter saw muted activity at seed and early stage, and fewer big late-stage rounds amid a lackluster IPO market.

Looking to the immediate future, it’s hard to see what will start the music playing again. Overall, venture and seed firms are putting less capital to work in fewer deals, and most of the negative factors that prompted investors to pull back are likely to linger like a bad headache into second-quarter 2023.

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