The Pitchbook report shows artificial intelligence and machine learning continued to dominate early-stage venture capital investment in the third quarter of 2024.

Investors Maintain Confidence in AI/ML

According to Pitchbook’s Emerging Tech Indicator report, artificial intelligence (AI) and machine learning (ML) continued to dominate early-stage venture capital (VC) investment in the third quarter of 2024. While AI/ML companies raised approximately $2 billion across 42 deals, surpassing biotech funding by more than four times ($472.5 million), the total was significantly lower than the $8 billion raised in Q2 across 53 deals.

This decline was largely attributed to two outlier deals: xAI’s $6 billion funding round and Safe Superintelligence’s $1 billion raise. Besides these two, the report suggests that AI/ML funding activity remains strong, indicating continued investor interest in the sector.

“Excluding these outliers, Q3 funding reflects a steady normalization in activity, with deal
volume underscoring continued investor interest across the sector,” the report explained.

Pitchbook data reveals a surge in fintech funding during Q3 with companies raising $449 million, nearly double the $228.4 million raised in the previous quarter. While funding increased, the number of deals declined from 25 in Q2 to 18 in Q3.

Key fintech funding deals involved Slope, which raised $65 million to expand its business payment and finance platform. Neo Asset Management secured $47.9 million, and Coast raised $40 million to enhance its fleet payment card management system.

The report also highlights a significant spike in Web3 and decentralized finance (DeFi) investment activity, with funding jumping from $93.9 million in Q2 to $373.8 million in Q3. This surge is attributed to renewed investor interest in blockchain technologies and decentralized platforms.

Story Protocol and ID Planet led the sector, each raising $80 million in Series B rounds. Partior, a blockchain-based cross-border payments platform, secured $60 million in a Series B funding round, while Chaos Labs, a cloud-based blockchain platform, raised $55 million.

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