PitchBook News - AI model prompts record funding

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The Daily Pitch: VC

December 30, 2024

The Daily Pitch is powered by PitchBook’s industry-defining research and best-in-class data

Mega-deals double AI foundation model funding in 2024

(Drew Sanders/PitchBook News)

Mega-deals led by some of the world’s largest investors and corporations have pushed funding for AI foundational models up more than 100% this year—and left smaller VC firms looking elsewhere for opportunities in AI.

A record of more than $40 billion was invested into foundation models and other AI cores startups this year, bringing the total raised since 2023 to $60.2 billion, according to PitchBook data.

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Cybersecurity VC funding returns to growth

Generative AI is lending a boost to information security VC investment, according to our recent Emerging Tech Research.

Infosec VC funding is on pace to grow year-over-year, with startups collecting $8.8 billion through Q3.

The Morningstar PitchBook Cybersecurity Unicorn Index has outperformed indexes of both global unicorns and AI unicorns since 2021.

A loaded IPO pipeline should benefit from Rubrik: The company went public in April, and its stock is up more than 50% over the past month.

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Mid-market recovery plays catch-up to larger buyouts

PE dealmaking in the middle market has sprung back to life. However, the recovery progressed at a less brisk pace compared to the broader PE market. Total middle-market deal value in Q3 rose 11% in Q3, while US buyouts of all sizes accelerated by 13.3% quarter-over-quarter, according to our US PE Middle Market Report, sponsored by LBMC.

In addition, exits remain sluggish, lagging pre-pandemic levels. Our analysts project fewer than 800 middle-market exits for 2024, below the annual average of nearly 900 from 2017 through 2019.

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