Venture funding rebounded in May to reach $31 billion, the highest monthly tally so far this year. Investment was up over 40% month over month and 29% year over year, with AI leading as the sector that raised the most funding.
A spate of billion-dollar fundings contributed to the total, with $11 billion — over a third of capital raised last month — invested in six companies in rounds at $1 billion or more. This was the highest count of billion-dollar fundings in a single month since the venture market slowdown began in 2022.
Elon Musk’s xAI raised the largest funding, $6 billion at a $24 billion value. Billion-dollar rounds also went to CoreWeave, Wayve, Abound, Scale AI and Wiz. Investors who led or co-led these fundings include Lightspeed Venture Partners, Andreessen Horowitz, Accel and GSR Ventures on the venture side. Growth investors Thrive Capital, Coatue and SoftBank also led rounds.
AI leads
In total, companies in the AI sector raised 40% of venture funding in May with $12.5 billion invested across more than 250 companies, based on an analysis of Crunchbase data. xAI raised close to half of that amount.
Other leading sectors include healthcare and biotech companies, which raised $5.1 billion, and financial services companies, which raised $3.9 billion last month.
As of the end of May, AI, healthcare and biotech are the leading sectors so far this year, with each raising around $27 billion in funding.
Are the M&A markets making a comeback?
A record five venture-backed companies were acquired for more than $1 billion this past month. Three were biotech companies EyeBiotech, HI-Bio and Mariana Oncology. In the enterprise software sector, Venafi, a machine identity security company, and AuditBoard, a cloud compliance management software provider, were acquired.
Looking forward
The increase in funding in May does not signal a growth in venture funding in future months. In the current slower funding environment, month-to-month funding tends to fluctuate, with large fundings raised predominantly by companies in the AI sector or late-stage unicorn companies.
Within the past 12 months, May 2024 was not the highest month for venture funding. The peak was $35 billion in September 2023 with $9 billion of that total raised in fundings of a billion dollars or more across four companies. In the months that followed, funding totals dropped by $10 billion or more from that 2023 monthly funding peak.
Methodology
The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of June 4, 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.
Industries in Crunchbase are not exclusive. A company can be in more than one industry and in more than one industry group.
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.)
TagsAI
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