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H1 2024 Venture Capital Recap:
Eyes on the Horizon for ‘25 in the US
As we reflect on the first half of 2024, let's break down the trends that shaped Q2 and look ahead to what the rest of the year and 2025 might have for the industry.
🕑 Read Time: 4.5 Minutes
📰 Key Highlights
Investor Surge: Q2 2024 saw a significant increase in pre-seed investor activity, and competition is heating up.
Steady Valuations: Pre-seed valuations held their ground, even amid broader economic uncertainty, signaling strong market confidence.
Sector Spotlight: AI-enabled/General SaaS and healthcare companies continued to attract the lion’s share of pre-seed funding. Big shoutout to FinTech for making a solid impact in the year's first half!
Carta. 2024. Carta State of Pre-Seed: Q2 2024. Carta, Inc.
🚀 Q2 2024 in Review
The second quarter of 2024 was marked by a surge in pre-seed investments, with more investors entering the fray eager to back the next generation of startups. Despite the economic bumps along the way, pre-seed valuations remained stable, a testament to the enduring confidence in early-stage ventures. It’s clear that the appetite for innovation is as strong as ever, and the competition is only getting fiercer.
Carta. 2024. Carta State of Pre-Seed: Q2 2024. Carta, Inc.
Carta. 2024. Carta State of Pre-Seed: Q2 2024. Carta, Inc.
Sector Focus: AI-enabled/General Saas and healthcare were the standout sectors in Q2, drawing in most of the investment dollars. These areas are not just popular; they’re proving resilient and full of potential as we move forward. If you’re not already invested in these sectors, it’s worth considering how they might fit into your portfolio.
Geographical Trends: The trend of investing outside traditional tech hubs continued to gain momentum in Q2. Regions once overlooked are now becoming hotbeds of innovation, offering unique opportunities for those willing to venture beyond the usual suspects.
Carta. 2024. Carta State of Pre-Seed: Q2 2024. Carta, Inc.
Outlook for H2 2024 and 2025: As we head into the latter half of 2024, we expect the momentum to continue building. Investors will likely keep flocking to AI-enabled/General Saas and healthcare, solidifying these sectors as pillars of the next wave of innovation. Additionally, with geographical diversification gaining steam, we will likely see more capital flowing into emerging regions.
Carta. 2024. Carta State of Pre-Seed: Q2 2024. Carta, Inc.
Looking ahead to 2025, the trends we’ve seen in Q2 are set to shape the year ahead. The competition for early-stage deals will only intensify, making it crucial for investors to differentiate themselves with capital and value-added services like mentorship and strategic guidance. Moreover, diversity in leadership will continue to be a key driver of success, as companies led by diverse founders consistently outperform their peers.
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🔥 Don’t Miss Out: As you plan for the remainder of 2024 and gear up for 2025, focus on AI-enabled/General Saas and healthcare-focused companies while exploring opportunities in emerging regions. And don’t forget the power of diversity—backing diverse founders is not just about doing good; it’s about driving better business outcomes.
📊 Quick Stats
47% of Q2 2024 Pre-Seed Investments: Concentration in AI-enabled/General Saas and healthcare companies, highlighting their importance as we head into 2025.
Digital Health funding demonstrated resilience globally, with a total investment of $12.4 billion across 719 deals in H1 2024, up 5% compared to H1 2023
Companies in the top quartile for gender diversity on executive teams are 39% more likely to outperform on profitability than those in the bottom quartile.
McKinsey & Company. (2023). Diversity Matters Even More
🌐 Links & Resources
Carta. 2024. Carta State of Pre-Seed: Q2 2024. Carta, Inc.
McKinsey & Company. (2023). Diversity Matters Even More
Rock Health. (2024, July 11). H1 2024 digital health funding: Resilience leads to brilliance. Rock Health. https://rockhealth.com/insights/h1-2024-digital-health-funding-resilience-leads-to-brilliance/
Galen Growth. (2024, July 15). H1 2024 digital health funding: Reaching the turning point. Galen Growth. https://www.galengrowth.com/h1-2024-digital-health-funding-reaching-the-turning-point/
💬 Final Thoughts
Q2 2024 set the stage for what’s to come. With strong momentum in key sectors and a growing focus on diversity and regional investment, the second half of the year—and 2025—promise to be dynamic and full of opportunities. Stay ahead of the curve by aligning your strategy with these emerging trends.
Pre-seed funding isn’t just a stepping stone in the startup journey—it’s a critical indicator of what’s to come. When we see steady pre-seed activity, it tells us the market has confidence in what’s brewing. It’s a sign that the pipeline is filled with high-potential startups, each with the grit and vision to move forward to bigger funding rounds.
Here’s to a strong finish in 2024 and an even brighter 2025!
Onward and upward,
Hugs,
Maximillian
P.S. Stay with me on this journey. :)