Although the global VC funding activity significantly slowed down after reaching a peak in 2021, companies and startups still raised close to $550 billion over the past two years, pushing the five-year total to impressive highs.
According to data presented by Stocklytics.com, VC investors have injected more than $2 trillion into companies across sectors and industries over the past five years.
A Market in Flux with a $2 Trillion Milestone
The past two years of global economic headwinds have significantly reshaped venture capital investing, slashing the total value of deals by nearly 50% since the record-breaking $548.7 billion raised in 2021. Although 2024 marked a modest rebound following a decline in 2022 and 2023, the VC market remains a mix of caution and opportunity.
Sectors like tech, AI, healthcare, and biotech have seen strong momentum in the first half of 2024, but overall, investors are treading carefully. According to Statista, total deal value rose by 7% this year and hit $280 billion, with only a slight growth forecast of 2.3% for 2025, far from the heights of recent years.
Despite the apparent slowdown, the market still hit over $2 trillion in deals closed over the past five years. This impressive amount of money came from approximately 250,000 deals, with most focused on seed and early-stage funding.
In global comparison, the United States is the undisputed leader, attracting over half of the total VC funding, an impressive $1.05 trillion. In second place, Chinese companies and startups secured nearly $500 billion, showing the country’s strong presence in the global VC ecosystem. Singapore, the third-largest VC funding market, has seen much less fresh capital, or $81.2 billion, since 2019.
What’s Next for VC Funding: Sustained Growth or Market Cooling?
After reaching a massive milestone of more than $2 trillion raised in just five years, the global VC funding landscape will likely face slower growth and increased selectivity in the coming years. Economic uncertainty, sectoral shifts, and a focus on profitability will continue to affect investor confidence, making a full recovery to 2021 levels unlikely any time soon.
Statista forecasts that global VC funding will reach $286.2 billion in 2025, only $6.5 billion more than this year, marking the slowest year-over-year growth in recent history. Statistics show the US market will grow by a modest 2.9% and hit a $140.4 billion value. Europe and Asia follow with 2.3% and 1.3% growth rates and $19.2 billion and $104.7 billion market values, respectively. This modest growth greatly contrasts with the growth rates seen in previous years, reflecting a more cautious and selective investors`approach.
