Rather than full automation, the industry is embracing a more nuanced approach where technology augments human capabilities, creating hybrid workplaces where workers are upskilled to work alongside and manage robotic systems. 

Today’s modular and scalable automation solutions enable incremental modernization, allowing logistics providers to start small, prove ROI, and gradually expand their automated operations while maintaining market adaptability. 

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Companies are responding by developing solutions like fire surveillance drones to better monitor wildfires, as well as firefighting robots to minimize the severity when they occur. In fact, over 500 US fire departments have already deployed surveillance drones.

To help companies and governments understand the current wildfire tech landscape, we mapped 130 companies across 15 markets. We then organized tech markets by the wildfire lifecycle: 

• Prevention & preparedness: Solutions in this category help forecast extreme weather events — including wildfires — and assess their damage potential. We break this category down into: 1) broader climate & weather risk; and 2) wildfire risk, which includes solutions specifically designed for wildfires.
• Detection & monitoring: These solutions use cameras, sensors, and analytics platforms to detect outbreaks early and track their progression to aid firefighting strategies.
• Firefighting: These technologies — such as drones and robots — support the suppression of wildfires or help create firebreaks to limit their spread.
• Damage assessment: This includes solutions to evaluate the destruction caused by wildfires after they occur.

Please click to enlarge.

To identify players for this market map, we included startups with a Mosaic score of 400 or greater and leading corporations developing wildfire tech. Categories are not mutually exclusive and are not intended to be exhaustive.

Track Mosaic health scores for companies in these markets

Market descriptions

Click the market links below for info on the leading companies, funding, and more.

Prevention & preparedness: Climate & weather risk

Climate & weather financial risk modeling focuses on quantifying the financial impacts of climate change and severe weather events, helping businesses forecast and mitigate monetary losses. Leading companies like Bloomberg and Morningstar serve many industries, from agriculture to insurance to government.

Geospatial analytics analyzes and interprets geographic data (e.g., satellite imagery, GIS) for various industries, providing spatial insights and risk assessments. Startups in this market have raised a combined $508M since 2023 — the most funding of any market in this map.

Weather risk intelligence emphasizes real-time weather monitoring and predictive modeling to reduce operational disruptions and manage day-to-day weather-related risks.

Climate risk intelligence provides deeper analysis of long-term climate change hazards, guiding strategic decision-making and resilience planning for businesses and governments.

Prevention & preparedness: Wildfire risk

Catastrophe modeling simulates large-scale natural disasters (e.g., hurricanes, earthquakes) to estimate potential losses, primarily for insurance and reinsurance purposes.

Wildfire risk intelligence zeroes in on wildfire hazards with analytics and forecasting tools, helping organizations anticipate fire spread and prioritize mitigation. This market has the highest average company Mosaic health score (662 out of 1,000) among wildfire-specific tech markets.

Detection & monitoring

Wildfire detection cameras use specialized imaging (thermal, infrared) to spot fire signatures early and relay alerts from fixed vantage points.

Wildfire detection sensors are ground-based devices that monitor environmental conditions (e.g., temperature, smoke) to detect potential fires in real time.

Fire surveillance drones provide aerial monitoring of wildfires using sensors like thermal imaging, enhancing situational awareness and firefighter safety. Companies in this market typically offer drones for a wider set of applications beyond wildfires. For example, Skydio, which has raised $400M since 2023, serves industries such as industrial inspection and defense, in addition to fire surveillance.

Wildfire detection & monitoring platforms integrate satellite/aerial data, IoT sensors, and AI in a software platform to track and predict wildfire behavior at scale. ICEYE and Pano AI rank as leading startups here, offering solutions for enterprises and governments through platforms that use advanced imaging systems and AI models to predict potential wildfire locations and facilitate real-time detection and monitoring.

Firefighting

Firefighting drones actively suppress fires by delivering water or fire-retardant agents, often equipped with thermal imaging to pinpoint hotspots. This is among the most nascent markets in the map, with 89% of deals since 2023 going to early-stage companies.

Firefighting robots are ground units equipped with sensors and suppression tools (e.g., water cannons), enabling safer and more efficient fire combat in hazardous areas.

Autonomous heavy equipment encompasses self-operating machinery (e.g., bulldozers, loaders) used in construction, mining, or creating firebreaks, reducing human risk.

Damage assessment

Drone inspection & damage assessment uses drones to capture high-resolution imagery of properties for quicker, more accurate insurance claims evaluations.

Aerial & satellite claims assessment leverages imagery from planes or satellites to evaluate property damage — often focused on large-scale or remote loss scenarios.

RELATED RESOURCES FROM CB INSIGHTS:

• Weather risk intelligence funding surges as extreme weather events pile up 
• Wildfires are causing insurers to leave markets. Can wildfire risk analytics reverse this trend? 
• The Aerospace & Space Tech expert collection
• The Insurtech expert collection
• The satellite & geospatial tech market map
• The AI in defense tech market map

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A key factor in the slowdown was a sharp drop in funding from mega-rounds ($100M+ deals), which dropped 47% year-over-year (YoY) in 2024. This coincided with high-profile bankruptcies of established climate tech startups like battery manufacturer Northvolt.

However, this turbulence wasn’t limited to the private markets — public players like Lilium and Arrival also filed for insolvency/bankruptcy over the period, highlighting the commercialization challenges facing capital-intensive industries like climate tech.

Download the full report to access comprehensive data and charts on the evolving state of climate tech across sectors, geographies, and more.

Key takeaways from the report include:

• Climate tech investment activity continues to contract. Global climate tech funding fell for the second year straight in 2024, dropping by 40% YoY, with mega-round funding falling by 47%. However, the space still saw notable mega-rounds. This included deals to players modernizing the power grid, drawing participation from tech giants racing to secure clean energy for computing infrastructure.
• Grid tech and nuclear are gaining momentum to meet AI’s energy needs. Within climate tech, markets targeting the grid and power generation show the strongest growth potential, according to CB Insights Mosaic startup health scores. This momentum is driven in part by the massive energy demands (and expected continued demand) of AI data centers.
• Electric vehicle technology sees record pullback in deals. After years of steady growth, electric vehicle (EV) tech deal activity plunged 61% YoY in 2024 — its steepest decline on record. This points to broader challenges in the sector, like lower consumer demand for EVs and increased capital costs for scaling manufacturing operations.
• Climate tech M&A exits decline once again. Climate tech M&A exits dropped by 25% YoY to hit 284, the lowest count since 2020. At the quarterly level, M&A exits steadily declined over the course of 2024, falling from 104 in Q1’24 to 39 in Q4’24. Growing skepticism around environmental, social, and governance (ESG) initiatives could be a contributing factor.

We dive into the trends below.

Climate tech investment activity continues to contract

Global climate tech funding dropped for a second consecutive year in 2024. It fell by 40% YoY, with mega-round funding falling by 47% over the same period.

The funding slowdown played out differently across the globe. US climate tech showed resilience YoY with relatively steady funding despite fewer deals. Meanwhile, other countries saw steep declines in climate tech dollars, with China experiencing the sharpest drop (-66% YoY).

Amid the overall funding decline, climate tech still saw several notable mega-rounds. This included deals in Q4’24 for companies modernizing the power grid:

• Crusoe secured $600M at a $2.8B valuation to support its efforts to use waste natural gas to power large-scale data centers
• X-energy received $500M as it works to build small modular reactors (SMRs) capable of generating more than 5 gigawatts of electricity by 2039
• Form Energy secured $405M to accelerate production of its iron-air batteries capable of 100-hour energy storage

Notably, some of these deals drew participation from big tech companies racing to secure clean energy for computing infrastructure. For example, Amazon (via the Climate Pledge Fund) invested in X-energy’s nuclear development, and Nvidia invested in Crusoe’s sustainable computing infrastructure, reflecting big tech’s interest in solutions that can help meet rising AI data center demands.

Grid tech and nuclear are gaining momentum to meet AI’s energy needs

Comparing median CB Insights Mosaic scores (a measure of private tech company health and growth potential on a 0–1,000 scale) for climate tech companies that raised equity funding in 2024 reveals the most promising markets in climate tech.

Grid tech and nuclear markets — covering technologies directly integrated into and operated by utilities to enhance power system reliability, flexibility, and clean energy integration — dominate the top 10 climate tech markets by median Mosaic score, highlighting their growth potential.

Surging energy demand from AI data centers is in part responsible for these markets’ momentum. For example, nuclear fusion and small modular reactors could provide continuous clean power generation, grid storage enables reliable renewable energy delivery, and virtual power plants help optimize massive power loads.

See 100+ high-potential climate tech companies

Electric vehicle technology sees record pullback in deals

Electric vehicle tech deals experienced their steepest decline on record in 2024, with deal count plunging 61% YoY to 243.

High-profile bankruptcies underscored the sector’s capital-intensive manufacturing challenges in 2024. Battery manufacturer Northvolt filed for bankruptcy a year after raising $1.2B, as it struggled to scale production efficiently. Electric van maker Arrival — which went public in 2021 at a $13B valuation — also filed for bankruptcy last year amid mounting production costs and the inability to raise funding.

Even the auto industry’s most prominent EV champions scaled back their electric ambitions throughout the year:

• GM delayed its Orion Assembly EV truck plant by 6 months and cut 2024 EV targets by 17%
• Toyota postponed US EV production to 2026
• Ford canceled plans to produce an all-electric three-row SUV, pivoting to a hybrid approach instead
• Volvo dropped its 2030 all-electric goal

Climate tech M&A exits decline once again

In 2024, climate tech M&A exits fell by 25% YoY to hit 284 — the lowest count since 2020.

At the quarterly level, M&A exits steadily declined over the course of 2024, falling from 104 in Q1’24 to 39 in Q4’24.

The decline in M&A activity coincided with key changes in market conditions, including the rise of economic headwinds, political uncertainty, and growing skepticism around environmental, social, and governance (ESG) initiatives.

For example, ESG tech markets collectively saw equity funding decline 54% YoY in 2024. On the corporate side, mentions of ESG in earnings calls have trended down since peaking in Q1’22.

As skepticism toward ESG initiatives grows, some companies appear to be placing lower priority on climate tech acquisitions that were previously considered strategic imperatives.

See recently funded climate tech companies with high M&A probabilities

MORE CLIMATE TECH RESEARCH FROM CB INSIGHTS

• Data centers are reshaping nuclear development, driving billions in new power infrastructure investment
• Why fleet management leaders are racing to acquire next-gen telematics capabilities — and which M&A targets could be next
• The AI data center value chain: 12 high-momentum technologies powering the future of AI
• The top 25 utility companies by AI readiness
• Big Tech in Energy: How Amazon, Google, Microsoft, & Nvidia are advancing the global energy transition
• Sodium-ion batteries are poised for a breakout moment — energy players should prepare

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However, global CVC deal count dropped to its lowest level since 2018 as CVCs become more selective.

Download the full report to access comprehensive data and charts on the evolving state of CVC across sectors, geographies, and more.

Key takeaways from the report include:

• CVC-backed funding grows, deal activity slows. Global CVC-backed funding increased 20% YoY to $65.9B, but deal count fell to 3,434, the lowest level since 2018. All major regions saw deal volume declines, with Europe dropping the most at 10% YoY.
• CVCs are all in on AI. AI startups captured 37% of CVC-backed funding and 21% of deals in 2024 — both record highs. Counter to the broader decline in deals, CVCs ratcheted up AI dealmaking by 13% YoY as they race to secure footholds in the space before competitors gain an insurmountable edge.
• The flight to quality continues. Among deals with CVC participation, the annual average deal size hit $27.3M in 2024, tied for the second highest ever. Amid fewer deals, CVCs are increasingly aggressive when they do decide to invest.
• Early-stage deals dominate. Early-stage rounds comprised 65% of 2024 CVC-backed deals, tied for the highest share in over a decade. Biotech startups made up half of the top 20 early-stage deals.
• CVC-backed funding plummets in Asia. In 2024, Asia’s CVC-backed funding dropped 34% YoY to $7B — the lowest level since 2016. China is leading the decline, with no quarter in 2024 exceeding $0.5B in funding. CVCs remain wary of investing in the country’s private sector.

We dive into the trends below.

CVC-backed funding grows, deal activity slows

Global CVC-backed funding reached $65.9B, a 20% YoY increase. The US was the main driver, increasing 39% YoY to $42.8B. Europe also saw CVC-backed funding grow 18% to $12.3B, while Asia declined 34% to $7B.

$100M+ mega-rounds also contributed to the rise, ticking up 21% YoY to 141 deals worth over $32B in funding.

Meanwhile, deal count continued its decline, as both annual (3,434 in 2024) and quarterly (806 in Q4’24) totals reached their lowest levels in 6 years.

Annual deal volume fell by at least 6% YoY across each major region — the US, Asia, and Europe — with Europe experiencing the largest decline at 10%.

However, Japan-based CVC deal volume remains near peak levels, suggesting a more resilient CVC culture compared to other nations. Two of the three most active CVCs in Q4’24 are based in Japan: Mitsubishi UFJ Capital (21 company investments) and SMBC Venture Capital (15).

Track recent activity from 1,000+ CVCs

CVCs are all in on AI

AI is driving CVC investment activity, much like the broader venture landscape. In 2024, AI startups captured 37% of CVC-backed funding and 21% of deals, both record highs.

In Q4’24, the biggest CVC-backed rounds went primarily to AI companies. These include:

• AI search startup Perplexity’s $500M Series C, backed by Nvidia’s NVentures 
• Coding AI copilot Poolside’s $500M Series B, backed by the venture arms for Citigroup, HSBC, Capital One, LG, eBay, and Nvidia
• AI computing processor developer Lightmatter’s $400M Series D, backed by GV

CVCs are also investing in the energy companies powering the AI boom, such as Intersect Power, which raised the largest round at $800M (backed by GV).

Expect the trend to continue into 2025, as emerging AI markets mature further, such as AI agents & copilots for enterprise and industrial use cases; AI solutions for e-commerce, finance, and defense; and the computing hardware necessary to power these technologies.

The flight to quality continues

In 2024, the annual average deal size with CVC participation reached $27.3M, a 34% YoY increase and tied for the second highest level on record, exceeded only by the low-interest-rate environment of 2021.​

Median deal size also increased, though only by 8% to $8.6M.

Even though the number of CVC-backed deals declined in 2024, the increase in average annual deal size reflects a focus on companies with strong growth prospects. CVCs are prioritizing quality and committing more funds to a select group of high-potential investments.

Early-stage deals dominate

Early-stage rounds (seed/angel and Series A) made up 65% of CVC-backed deals in 2024, tied for the highest recorded level in more than a decade.​

In Q4’24, biotech companies were the early-stage fundraising leaders, accounting for 10 of the 20 largest early-stage deals. Biotech players City Therapeutics, Axonis, and Trace Neuroscience all raised $100M+ Series A rounds, with City Therapeutics and Axonis notably receiving investment from the venture arms of Regeneron and Merck, respectively.

Among all early-stage CVC-backed companies, the largest round went to Physical Intelligence, a startup focused on using AI to improve robots and other devices. Physical Intelligence raised a $400M Series A with investment from OpenAI Startup Fund.

Explore CVCs’ top early-stage company targets in Q4

CVC-backed funding plummets in Asia

Asia’s CVC-backed funding continued its downward trend in 2024, decreasing 34% YoY to $7B.

China was the main driver, with CVC-backed funding coming in at $0.5B or less every quarter in 2024.​ CVCs remain wary of investing in startups in the nation, which faces a variety of economic challenges, including a prolonged real estate slump, cautious consumer spending, strained government finances, and weakened private sector activity amid policy crackdowns.

In Japan, on the other hand, CVC activity remains robust. In 2024, funding with CVC participation ($1.7B) remained on par with the year prior, while deals (502) actually increased by 11%.

MORE VENTURE RESEARCH FROM CB INSIGHTS

• State of Venture 2024 Report
• State of Fintech 2024 Report
• State of Digital Health 2024 Report

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Venture funding surged past the $100B mark for the first time as AI infrastructure players pulled in billion-dollar investments. A wave of M&A deals and rapidly scaling AI unicorns further underscored the tech’s momentum.

Download the full report to access comprehensive data and charts on the evolving state of AI across exits, top investors, geographies, and more.

Key takeaways include: 

• Massive deals drive AI funding boom. AI funding hit a record $100.4B in 2024, with mega-rounds accounting for the largest share of funding we’ve tracked to date (69%) — reflecting the high costs of AI development. Quarterly funding surged to $43.8B in Q4’24, driven by billion-dollar investments in model and infrastructure players. At the same time, nearly 3 in 4 AI deals (74%) remain early-stage as investors look to get in on the ground floor of the AI opportunity. 
• Industry tech sectors lose ground in AI deals. Vertical tech areas like fintech, digital health, and retail tech are securing a smaller percentage of overall AI deals (declining from a collective 38% in 2019 to 24% in 2024). The data suggests that companies focused on infrastructure and horizontal AI applications are drawing greater investor interest amid generative AI’s rise.
• Outside of the US, Europe fields high-potential AI startup regions. While the US dominated AI funding (76%) and deals (49%) in 2024, countries in Europe show strong potential in AI development based on CB Insights Mosaic startup health scores. Israel leads with the highest median Mosaic score (700) among AI companies raising funding. 
• AI M&A activity maintains momentum. The AI acquisition wave remained strong in 2024, with 384 exits nearly matching 2023’s record of 397. Europe-based startups represented over a third of M&A activity, cementing a 4-year streak of rising acquisitions among the region’s startups. 
• AI startups race to $1B+ valuations despite early market maturity. The 32 new AI unicorns in 2024 represented nearly half of all new unicorns. However, AI unicorns haven’t built as robust of a commercial network as non-AI unicorns, per CB Insights Commercial Maturity scores, indicating their valuations are based more on potential than proven business models at this stage.
• Tech leaders embed themselves deeper in the AI ecosystem. Major tech companies and chipmakers led corporate VC activity in AI during Q4’24, with Google (GV), Nvidia (NVentures), Qualcomm (Qualcomm Ventures), and Microsoft (M12) being the most active investors. This reflects the strategic importance of securing access to promising startups while providing them with essential technical infrastructure.

We dive into the trends below.

For more on key shifts in the AI landscape in 2025, check out this report on the implications of DeepSeek’s rise.

Massive deals drive AI funding boom

Globally, private AI companies raised a record $100.4B in 2024. At the quarterly level, funding soared to a record $43.8B in Q4’24, or over 2.5x the prior quarter’s total. 

The funding increase is largely explained by a wave of massive deals: mega-rounds ($100M+ deals) accounted for 80% of Q4’24 dollars and 69% of AI funding in 2024 overall.

The year featured 13 $1B+ deals, the majority of which went to AI model and infrastructure players. OpenAI, xAI, and Anthropic raised 4 out of the 5 largest rounds in 2024 as they burned through cash to fund the development of frontier models. 

Overall, the concentration of funding in mega-rounds reflects the high costs of AI development across hardware, staffing, and energy needs — and widespread investor enthusiasm around the AI opportunity. 

But that opportunity isn’t limited to the largest players: nearly 3 in 4 AI deals (74%) were early-stage in 2024. The share of early-stage AI deals has trended upward since 2021 (67%) as investors look to ride the next major wave of value creation in tech.

CBI Customers: Track 15,000+ AI companies

Industry tech sectors lose ground in AI deals

Major tech sectors — fintech, digital health, and retail tech — are making up a smaller percentage of AI deals.

While the overall annual AI deal count has stayed steady above 4,000 since 2021, dealmaking in sectors like digital health and fintech has declined to multi-year lows. So, even as AI companies make up a greater share of the deals that do happen in these industries, the gains haven’t been enough to register in the broader AI landscape.

The data suggests that, amid generative AI’s ascendancy, AI companies targeting infrastructure and horizontal applications are drawing a greater share of deals. 

With billions of dollars flowing to the model/infra layer as well, investors appear to be betting that the economic benefits of the latest AI boom will accrue to the builders.  

Outside of the US, Europe fields high-potential AI startup regions

Although US-based companies captured 76% of AI funding in 2024, deal activity was more distributed across the globe. US AI startups accounted for 49% of deals, followed by Asia (23.2%) and Europe (22.9%). 

Comparing median CB Insights Mosaic scores (a measure of private tech company health and growth potential on a 0–1,000 scale) for AI companies that raised equity funding in 2024 highlights promising regional hubs. 

Explore 500+ high-potential AI startups

European countries dominate the top 10 countries by Mosaic score (outside of the US). Israel, which has a strong technical talent pool and established startup culture, leads the pack with a median Mosaic score of 700.

Overall activity on the continent is dominated by early-stage deals, which accounted for 81% of deals to Europe-based startups in 2024, a 7-year high.

The European Union indicated in November that scaling startups is a top priority, pointing to the importance of increased late-stage private investment in remaining competitive on the global stage.

AI M&A activity maintains momentum

The AI M&A wave is in full force, with 2024’s 384 exits nearly reaching the previous year’s record-high 397.

Acquisitions of Europe-based startups accounted for over a third of AI M&A activity in 2024. Among the global regions we track, Europe is the only one that has seen annual AI acquisitions climb for 4 consecutive years. Although the US did see a bigger uptick YoY (16%) in 2024, posting 188 deals. 

In Europe, UK-based AI startups led activity in 2024, with 32 M&A deals, followed by Germany (18), France (16), and Israel (12). 

Major US tech companies, including Nvidia, Advanced Micro Devices, and Salesforce, participated in some of the largest M&A deals of the year as they embedded AI across their offerings.

Search for recently funded AI companies with high M&A probabilities

AI startups race to $1B+ valuations despite early market maturity 

AI now dominates new unicorn creation. The 32 new AI unicorns in 2024 accounted for nearly half of all companies passing the $1B+ valuation threshold during the year. 

These AI startups are hitting unicorn status with much smaller teams and at much faster rates than non-AI startups: 203 vs. 414 employees at the median, and 2 years vs. 9 years at the median. 

CBI Customers: Dive into data on every unicorn

These trends reflect the current AI hype — investors are placing big early bets on AI potential. Many of these unicorns are still proving out sustainable revenue models. We can see this clearly in CB Insights Commercial Maturity scores. More than half of the AI unicorns born in 2024 are at the validating/deploying stages of development, while non-AI new unicorns mostly had to get to at least the scaling stage before earning their unicorn status.

Tech leaders embed themselves deeper in the AI ecosystem

In Q4’24, the top corporate VCs in AI (by number of companies backed) were led by a string of notable names: Google (GV), Nvidia (NVentures), Qualcomm (Qualcomm Ventures), and Microsoft (M12). 

As enterprises rush to harness AI’s potential, big tech, chipmakers, and other enterprise tech players are building their exposure to promising companies along the AI value chain.

Meanwhile, startups are linking up with these players to not only secure funding for capital-intensive AI development but also access critical cloud infrastructure and chips.

MORE AI RESEARCH FROM CB INSIGHTS

• What DeepSeek’s model releases mean for the future of AI
• Here’s how leading strategy teams are successfully driving generative AI adoption in their organizations
• The foundation model divide: Mapping the future of open vs. closed AI development
• 15 tech trends to watch closely in 2025
• Inside the AI drug discovery arms race: Record M&A activity, a biologics funding spree, and more
• The industrial AI agents & copilots market map

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US data center power consumption is projected to triple from 25GW in 2024 to over 80GW by 2030. Between 2023 and 2028, data centers could drive nearly half of US electricity growth.

Tech companies are increasingly exploring nuclear energy as a reliable, carbon-free power source to support AI’s exponential growth.

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These attacks can inflict damages costing billions of dollars. Since 2017, every critical infrastructure cyberattack causing an estimated $1B+ in damages has affected the healthcare sector in some capacity, highlighting its particular vulnerability to digital threats.

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But beyond the momentum building in AI, global deal activity plunged 19% YoY to its lowest level since 2016, creating both challenges and opportunities for investors and corporate strategists.

Download the full report to access comprehensive data and charts on the evolving state of venture across sectors, geographies, and more.

Key takeaways from the report include:

AI is eating VC. In 2024, AI represented 37% of venture funding and 17% of deals — both all-time highs. AI infrastructure players raised all of the top 5 venture deals of the year, with 4 closing in Q4’24 alone — driving a 2-year high in quarterly funding. With nearly 3 in 4 (74%) AI deals being early-stage in 2024, investors are staking out early claims to reap the rewards of the tech’s potential.

Aside from AI, venture dealmaking is in a drought. Globally, deal activity fell 19% YoY to 27K in 2024 — its lowest annual level since 2016. The drop was most pronounced in countries like China (-33% YoY), Canada (-27%), and Germany (-23%). However, several countries in Asia — Japan, India, and South Korea — have bucked the downward trend. Their resilience suggests attractive investment conditions.

AI and industrial automation are common themes among the fastest-growing tech markets. Out of 1,400+ tech markets that CB Insights tracks, those with the highest rate of YoY deal growth include enterprise AI agents, genAI for customer support, industrial humanoid robots, and autonomous driving systems. Expect these technologies to continue maturing in 2025, increasing their disruptive potential.

Despite market uncertainty, early-stage valuations hit a record-high median of $25M in 2024. Investors are packing into early-stage rounds to ride the next major wave of value creation in tech, likely drawn by startups’ ability to now build products with less capital and fewer people thanks to AI tools and infrastructure. However, early-stage startups could face a reality check when they try to raise later-stage rounds if they have yet to prove they can sustain growth. Although mid- and late-stage deal valuations rebounded slightly vs. 2023, they remain muted compared to 2021 and 2022.

IPO timelines get delayed. From first funding to IPO, VC-backed companies that went public in 2024 waited a median of 7.5 years — 2 years longer than in 2022. Amid unfavorable market conditions, some late-stage players like Stripe and Databricks have resorted to raising additional equity funding or selling private shares in lieu of going public. This allows them to create liquidity for early investors and employees when the path to a public debut is rocky.

We dive into each trend below.

AI is eating VC

The 5 largest deals of the year all went to AI model and infrastructure players (led by Databricks’ $10B Series J, followed by a $6.6B round for OpenAI, two $6B rounds for xAI, and a $4B round for Anthropic). But the activity isn’t limited to the largest, most well-resourced AI players. 

Across the board, AI companies are capturing a higher share of deal volume — nearly one in 5 deals (17%) now go to AI companies, almost triple the share from 2015 (6%). AI deal volume remained above 4,000 for the fourth year in a row. 

CBI customers: Track 15,000+ AI companies

The boom is providing tailwinds for every stage of the startup lifecycle, from early-stage companies — which take 3 out of 4 deals in AI — to startup exits. The AI M&A wave is in full force, with 2024’s 384 exits nearly rivaling the previous year’s record-high 397.

This trend will continue in 2025 as incumbents look to grab AI tech and talent and build end-to-end AI offerings. Get the full breakdown of what AI M&A means for corporate strategy in our Tech Trends 2025 report.

In Q4’24, the AI boom helped fuel a substantial rebound in global funding. The quarter’s funding tally reached $86.2B — a 2-year high, and an increase of 53% quarter-over-quarter (QoQ).

60% of that quarterly total, or $52B, came from mega-rounds (deals worth $100M+) — nearly tying Q1’21 (61%) for the highest share ever across venture. 

At the same time, quarterly deal volume steadily declined throughout 2024, including slipping below 6,000 in Q4’24 for the first time since 2016.

Aside from AI, venture dealmaking is in a drought

Despite AI’s surge, most venture sectors face their worst dealmaking drought in nearly a decade, forcing investors to adjust their strategies. Many investors are taking a more selective and risk-off approach right now as they wait out macroeconomic volatility and geopolitical tensions.

Among major dealmaking countries and regions (those seeing 500+ deals per year), the slump was most pronounced in China (-33% YoY drop in deals), Canada (-27%), and Germany (-23%). 

However, several countries in Asia bucked the trend and notched slim YoY gains: Japan (+2%), India (+1%), and South Korea (+1%). These countries have invested heavily in developing their startup ecosystems and may be benefiting indirectly from investors diverting funds away from China.

AI and industrial automation are common themes among the fastest-growing tech markets

AI and industrial automation are at the center of some of the fastest-growing markets in tech.

We filtered CB Insights’ 1,400+ tech markets for those with at least 20 equity deals over the last 2 years, then singled out those with the strongest deal growth YoY in 2024.

The enterprise tech and industrials sectors dominate, comprising 9 of the top 10 tech markets. Advancements in generative AI are fueling much of the activity in areas like humanoid robots and autonomous driving systems. Investors are also backing tech companies improving industrial processes like water treatment and purification, with deals to the market more than doubling YoY.

The enterprise tech and industrials sectors are also seeing a wave of hiring, as they lead in YoY headcount growth among all sectors. Industrials markets saw an average of 11% headcount growth last year, followed by enterprise tech markets with 10%. 

Financial services and the consumer & retail industries are noticeably absent from the top 10 fastest-growing markets. Given the tough venture landscape, emerging technologies in these areas face an uphill battle.

CBI Market Index: Compare 1,400+ markets

Early-stage deals are showing strength

Globally, early-stage dealmaking represents one of the most vibrant areas of venture right now, with median deal size and valuation reaching all-time highs in 2024.

The seed/angel and Series A stages remain resilient despite the broader downturn, in part because investors view them as a safe haven to ride out late-stage challenges like constricted exit opportunities and capital constraints. Deal sizes and valuations for the mid- and late stages rebounded slightly vs. 2023 but were muted when compared to the boom times of 2021 and 2022.

Corporate strategy and development teams seeking out early-stage opportunities can see 900+ high-potential startups here. To identify these players, we looked at the nearly 11,000 VC-backed startups that raised seed or Series A rounds in 2024, then filtered for those with the healthiest businesses (600+ Mosaic score) and strongest management teams (600+ Management Mosaic score).

Explore 900+ high-potential early-stage startups

IPO timelines get delayed

Most tech firms continue to shirk the IPO market. Some are still waiting for macroeconomic conditions to stabilize, while others prefer to focus on topline growth without having to deal with the financial scrutiny that comes with being a public company.

This is pushing back the timelines for IPO-ready companies even further. 

From first funding to IPO, VC-backed companies that went public in 2024 waited a median of 7.5 years — 2 years longer than in 2022.

While Q4’24 saw an uptick in global IPOs, activity remains down vs. historical levels. In the current climate, many late-stage startups will likely opt instead to raise more private funding to sustain operations and pay out employees or early investors.

Search for recently funded companies with high IPO probabilities

Related resources from CB Insights:

• Live briefing on venture trends for 2025
• All AI research from CBI
• 15 tech trends to watch closely in 2025
• Game Changers 2025: 9 technologies that will change the world
• $1B+ Market Map: The world’s 1,249 unicorn companies in one infographic

The post State of Venture 2024 Report appeared first on CB Insights Research.

While AI copilots — which work alongside humans to speed up their workflows — currently comprise 90% of company activity, the tech will serve as a stepping stone to more autonomous solutions in the coming years. Eventually, AI agents could manage entire industrial processes, shifting human roles from operational tasks to strategic oversight.

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But the overall slowdown only tells part of the story. Within this smaller pool of new billion-dollar companies, AI startups have come to dominate, comprising 44% of new unicorns this year — a 7x increase in share over the last decade.

Here’s what today’s unicorn landscape signals about the future of tech:

• AI dominates new unicorn creation — 2024 has seen 72 companies become unicorns, and 32 of these (44%) are AI startups. These AI players are reaching unicorn status far faster (median of 2 years) than non-AI companies (median of 9 years). As AI capabilities advance at a rapid pace — across domains from intelligent robotics to coding AI agents — corporations that delay AI adoption risk falling behind their competitors.
• Valuations are under pressure — Over one-third of the 1,200+ current unicorns haven’t raised funding since 2021, and over 100 of these companies were last valued at exactly $1B — meaning a down round would take their unicorn status away altogether. These represent potentially distressed assets that cash-rich incumbents and corporate development teams would want to snap up.
• Next in line for an exit — Among today’s unicorns, 110 stand out with IPO probabilities above 20% (anywhere from 31x to 64x that of the average company we track). Another 25 have equally high M&A probability scores, making them prime acquisition targets for incumbents looking to expand their tech and market reach.

Market map of billion-dollar startups

On paper, today’s unicorns are collectively worth over $4T. 

However, it’s unlikely that many of these 1,200+ companies are worth as much as their latest valuation, given how dramatically the venture landscape has changed since the heady days of 2021/22. Since then, tighter capital markets have applied downward pressure on public and private tech company valuations alike.

Over one-third of current unicorns haven’t raised a funding round since 2021. If they were to raise in today’s climate, they’d likely face a valuation cut. That includes over 100 unicorns that were last valued at exactly $1B — meaning any valuation reduction would strip them of their unicorn status.

CBI customers: Dive into data on every unicorn

With venture funding at its lowest level since 2016/17, unicorns in need of cash are likely considering an exit. Some have been waiting years for the IPO market to open up so they can access capital and compensate employees without further diluting their business. Others will need to accept sales at discounted prices.

Unicorns most likely to exit via IPO or M&A

Per CB Insights’ Exit Probability scores — which measure a company’s likelihood to exit in the next 2 years, based on 70+ data points — a select cohort of unicorns emerges as the most likely candidates for IPO and M&A. 

110 unicorns have a 20% or higher chance of IPO’ing in the next 2 years — anywhere from 31x to 64x the likelihood of the average company we track. Recent tech IPOs have performed well relative to the cold snap of 2022/23, particularly for companies benefiting from the AI boom. This will likely open the doors to other IPO hopefuls like Klarna, which is reportedly considering debuting as soon as H1’25.

A smaller segment of unicorns has an M&A exit probability of 20%+ (from 2x to 5x the average). This includes unicorns like AI data company Tresata (38% M&A probability) and fleet management & telematics provider Radius (33%), both of which have faced headcount reductions over the last year.

These acquisition targets could offer incumbents a way to quickly add new tech and talent as well as expand their customer base and market reach.

See the IPO and M&A probabilities for every unicorn

AI has become a unicorn factory

The current AI boom is a driving force behind new unicorn creation. 

In 2024 so far, 44% of new unicorns have been AI companies. This is by far the highest share that AI has seen over the past decade, representing over 7x growth during that time (from 6% in 2015).

What’s more, these AI startups are hitting unicorn status with 1) much smaller teams and 2) at much faster rates.

Among new unicorns in 2024, the median AI unicorn has just 203 employees and reached unicorn status in 2 years from its founding date. For comparison, the median non-AI company to become a unicorn did so with double the team size (414 employees) and a much longer life-span (9 years).

The size of these AI teams — and the speed with which they attain unicorn status — points to several underlying factors. For one, today’s AI startups may be able to do more with less — they can use their AI expertise to automate certain functions and scale faster with less staffing than a non-AI company. 

But there’s a likely bigger factor at play: With the current pace of AI advances, alongside the sheer amount of AI hype, AI startups are able to earn investors’ attention earlier and with less to show for their business than non-AI companies. The AI opportunity means many of these startups can bank on fast revenue growth, though it’s unclear how sustainable that is — or when, if ever, that revenue will translate into profit. 

Nevertheless, the breadth of the AI opportunity — across industries, business models, and audiences — means that there is still plenty of white space for these startups to carve out niches.

Among this year’s new unicorns, some of the smallest AI teams include:

• World Labs: 18 employees (founded 2024, valued at $1B)
• Skild AI: 19 employees (founded 2023, valued at $1.5B)
• Sakana AI: 34 employees (founded 2023, valued at $1.5B)
• Cognition AI: 49 employees (founded 2023, valued at $2B)
• Poolside: 75 employees (founded 2023, valued at $3B)

Notably, these startups point to several emerging areas of opportunity in AI:

Intelligent robotics and embodied AI — Both World Labs and Skild AI are working toward making AI systems that can better understand and interact with the physical world. This is also an area where OpenAI is getting involved, via investments in other unicorns like Figure and Physical Intelligence.

Coding AI agents & copilots — Cognition AI and Poolside both focus on automating software engineering. Equity funding to coding AI agents & copilots has exploded this year, nearly tripling to reach $1.8B.

RELATED RESEARCH FROM CB INSIGHTS:

• 15 tech trends to watch closely in 2025
• State of Venture Q3’24 Report
• Future of the workforce: How AI agents will transform enterprise workflows
• Future Tech Hotshots: 52 emerging tech startups that will have big, successful exits

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Through M&A, leaders like PowerFleet and Element Fleet Management are layering on expanded capabilities that help fleet managers optimize for elements like charging schedules, battery range, autonomous routing efficiency, and maintenance cycles.  

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The AV space has seen equity funding triple this year to $7.5B, and robotaxi services are notching notable milestones — Waymo, for instance, recently hit 150K paid rides per week, 3x the volume from just 5 months prior.

Among key growth drivers, generative AI is helping remove hurdles to widespread adoption, while the potential for regulatory pullback may attract more investors in the year to come.

Source: CB Insights — advanced search for autonomous driving company funding as of 11/13/2024.

In this brief, we highlight potential approaches to tap into the autonomous driving opportunity — including partnering with self-driving stack developers, acquiring or investing in AV assets at attractive valuations, and supplying AV makers with the necessary components to scale.

Here are 4 key takeaways from our analysis:

1. Self-driving stack developers are best positioned for partnership in autonomous driving’s second wave: Waymo and Wayve have led this year’s funding rebound (combined ~90% of equity funding this year) as they make commercial gains and inch toward profitability. Both players are leveraging genAI to improve their self-driving systems and are opportunistically targeting multiple autonomous driving use cases.
2. OEMs are keeping their loss-making self-driving units afloat with fresh capital injections: Despite facing safety issues and commercialization delays, some OEMs view autonomous driving capabilities as strategically non-negotiable, with GM and Hyundai injecting a combined $1.4B in their self-driving units this year. At the same time, they may consider welcoming new financial backers to reduce their risk — creating opportunities for other OEMs to gain exposure to the space.
3. Ride-hailing players can partner with robotaxi companies to mitigate the impact to their business model: Ride-hailing companies are pursuing multiple autonomous driving partnerships at once — Lyft and Uber, for example, have formed a combined 6 partnerships this year. In turn, robotaxi companies should target a similar multi-platform strategy to maximize market reach.
4. In China, autonomous driving players have been pushed to go public at reduced valuations: Companies like WeRide and Horizon Robotics are debuting at prices discounted by 20% or more. The pressure these companies face to demonstrate near-term results represents an opportunity for OEMs and logistics companies to negotiate advantageous terms for strategic partnerships, investments, or even acquisitions.

We dive into each point below.

Self-driving stack developers are best positioned for partnership in autonomous driving’s second wave

After a 2-year funding winter, the autonomous driving space has attracted $7.5B in equity funding so far this year, a 3x YoY increase, driven by massive rounds to self-driving stack developers like Waymo ($5.6B Series C) and Wayve ($1.1B Series C).

Source: CB Insights — advanced search for autonomous driving mega-rounds in 2024 as of 11/13/2024.

Waymo hits key commercial milestones, leading US robotaxi rollout

Waymo has been hitting significant milestones this year, tripling its number of weekly paid rides from 50K in May to 150K in October. It has emerged as a competitor to ride-hailing giants in a few US cities, although its volume pales in comparison to the ~5M weekly rides offered by the likes of Uber and Lyft in NYC alone.

Waymo has also made progress toward profitability, with Sundar Pichai, CEO of Waymo parent Alphabet, highlighting significant cost reduction during Alphabet’s Q3’24 earnings call.

This has helped give investors confidence that Waymo is well-positioned to lead the commercial rollout of robotaxis in the US. The company was valued at $45B in its latest round, up from $30B.

Source: CB Insights — Alphabet’s Q3’24 earnings call

Compare robotaxi companies to identify potential partners

GenAI increases hopes of full autonomy breakthrough

Advancements in genAI are also acting as a tailwind in the autonomous driving space, with hopes that this technology can accelerate the timeline for full autonomous driving by removing remaining hurdles — such as cost, explainability, and vehicle-passenger communication.

Both Waymo and Wayve are investing heavily in the use of genAI to improve their existing autonomous driving systems.

Wayve specifically is developing a self-learning end-to-end AI driving system similar to Tesla’s that could be used by any automaker and is financially backed by some of the biggest AI players such as Microsoft and Nvidia.

Report: How generative AI is impacting autonomous driving

Self-driving stack developers target multiple autonomous driving use cases

The ability to target multiple autonomous driving use cases is another key strength of self-driving stack developers, allowing them to opportunistically pivot to focus on the most commercially promising ones. For example:

• Waymo reined in its investments in trucking use cases back in July 2023 to instead focus on robotaxis, where it saw more near-term commercial momentum. The company is now considering expanding into the personal car use case by licensing its technology.
• Wayve formed early partnerships with UK grocery retailers ASDA and Ocado, focused on home delivery of groceries. The company is now pushing deeper into robotaxis, partnering with Uber to roll out self-driving vehicles on the ride-hailing giant’s platform in the future.

Traction in the robotaxi space is driving other players to reconsider their AV strategy. For example, Elon Musk has increasingly framed Tesla as a robotaxi company — although the timing of the Tesla Cybercab launch remains uncertain.

Demonstrating a path to profitability will be key for robotaxi companies — including Waymo — to justify their outsized funding rounds, creating opportunities for OEMs and mobility players to help them scale or monetize their technology through licensing.

Their success also hinges on more municipalities and countries authorizing their operations, something that’s likely to take time unless regulations become less restrictive.

OEMs are keeping their loss-making self-driving units afloat with fresh capital injections

Despite mounting challenges such as safety issues and delayed commercialization, major OEMs such as General Motors (GM) and Hyundai have recalibrated their autonomous driving strategies while continuing to finance their subsidiary operations.

The sustained funding from OEMs amid setbacks reflects several strategic imperatives. For one, they’re still banking on the potential for returns on their significant existing investments, while also looking to position themselves competitively against tech-native OEMs such as Tesla and BYD.

Perhaps more importantly, it allows them to not miss out on the growth of the robotaxi industry by serving as suppliers of choice for vehicles and AV hardware — without bearing the full cost of software development. For example, Hyundai partnered with Waymo earlier this year to provide the robotaxi company with a fleet of vehicles equipped with autonomous tech.

Source: CB Insights — advanced search for corporate majority rounds in autonomous driving companies as of 11/13/2024.

GM provided its robotaxi unit Cruise an $850M lifeline despite safety incidents that forced the company to pause its service back in October 2023. The funding aims to bridge Cruise as it relaunches its service in select US cities, with the intent to charge for rides at the beginning of 2025.

Hyundai invested nearly $1B — including a $475M fresh capital injection — to gain 85% control of Motional, an autonomous driving JV between Hyundai and Aptiv. Aptiv’s stake reduction in the JV followed a strategic decision to cease further investment due to delayed commercialization.

Given the market pressures and challenges these units have faced, other OEMs may have an opportunity to gain exposure to the autonomous driving space by partnering with or investing in these units on favorable terms rather than trying to build the technology themselves. 

Ride-hailing players can partner with robotaxi companies to mitigate the impact to their business model

The ride-hailing industry is undergoing a major shift as platforms rush to integrate AVs into their networks.

While these partnerships offer compelling near-term advantages, they also highlight the existential challenges facing traditional ride-hail business models in an autonomous future.

Source: CB Insights — business relationship data for Uber and Lyft as of 11/13/2024

Leading platforms such as Uber and Lyft — which sold their autonomous driving units in 2020 and 2021, respectively — are pursuing multiple parallel relationships with autonomous driving developers, suggesting both urgency and hedging strategies.

Between the two, Uber is currently leading the way with 5 partnerships since 2023, 4 of which have been signed since August this year. In September, the company announced an expansion of its partnership with Waymo, giving access to Waymo’s robotaxi through the Uber app in Austin and Atlanta (starting in 2025) in addition to Phoenix, where Uber users have been able to order a Waymo since October 2023.

These partnerships offer immediate operational benefits: reduced driver costs, improved service reliability, and the ability to better manage surge pricing.

However, they also expose how the current ride-hailing platform model faces disruption — that is, by helping autonomous driving companies build direct relationships with consumers and gain real-world miles to improve their autonomous operations. This creates a paradox where ride-hail companies are essentially helping to incubate their potential future competitors.

Looking forward, ride-hail companies face 3 distinct strategic paths:

• Partnership strategy: betting on becoming the dominant platform layer atop multiple autonomous driving systems providers
• Acquisition strategy: buying autonomous driving capabilities to maintain control of the full stack
• Potential acquisition target: positioning themselves to be acquired by autonomous driving companies seeking customer relationships and operational expertise

The choice between these paths will likely determine which companies survive the transition to autonomous mobility. 

Report: How Uber is redefining its core businesses in the age of autonomy

In China, autonomous driving players have been pushed to go public at reduced valuations

China is also seeing heightened activity in the autonomous driving space this year, including growing adoption of robotaxis. Baidu‘s Apollo Go service, for instance, averaged 75K fully driverless rides per week in Q2’24, up 26% YoY.

Chinese autonomous driving companies are also leading an exit wave through public listings, with Horizon Robotics and WeRide going public in October and Pony.ai, Momenta, and Minieye all recently filing to do the same. But they’re doing so at a discount to their last private valuations, reflecting limited access to private capital at a time of accelerating commercialization. 

Source: CB Insights — advanced search for autonomous driving exits over time as of 11/13/2024 (excludes corporate majority deals)

Both Horizon Robotics and WeRide completed their IPOs at a more than 20% discount to their last private valuations, while Pony.ai is reportedly seeking a $4.6B IPO valuation, down from $8.6B just a year ago.

Private funding for China-based autonomous driving companies has dropped 90% since 2021, from $4B to less than $400M in 2024 YTD. The funding drought is pushing many of these companies to secure public funding or risk falling behind in the capital-intensive race to autonomy.

This funding crunch comes at a particularly critical time, as many players are accelerating their commercialization efforts and require capital to scale operations. As newly public companies face greater scrutiny over quarterly performance and profitability, they’re likely to prioritize near-term revenue generation over long-term technological development. 

For transportation and mobility companies looking to expand in China, this creates opportunities to partner on advantageous terms with local players that need to show commercial progress.

This shift will also create an opening for well-funded private players like Waymo, which can maintain their focus on achieving full autonomy without the pressures of public market expectations. 

Finally, the need for operational efficiency is likely to drive consolidation within the industry, as public companies seek cost synergies and combined market power to improve their financial metrics.

Identify likely autonomous driving acquisition targets

Looking ahead

Robotaxi adoption and genAI integration are already driving the next phase of the autonomous driving market’s evolution, pushing mobility players and OEMs to reassess their strategies after some had reduced their exposure to the space.

Although the success of robotaxi operations hinges on gaining regulatory approval in many more cities — which, in the US, may be accelerated under the incoming administration — expect to see a flurry of partnerships and strategic investments as automakers, autonomous driving hardware suppliers, and mobility platforms all vie to help robotaxi companies scale and get a share of the market.

As leaders such as Waymo race ahead, emerging autonomous driving companies will have to choose between accelerating the commercialization of their existing solutions or trying to outcompete winners on technological advancements (e.g., full driving autonomy, significantly cheaper autonomous driving systems, etc.).

Either strategy will likely require pooling resources, leading to consolidation in the space.

MORE AUTONOMOUS VEHICLE RESEARCH FROM CB INSIGHTS:

• Generative AI is accelerating the timeline for fully autonomous driving
• Autonomous driving systems market report
• Uber’s AV strategy: How the rideshare giant is redefining its core businesses in the age of autonomy
• Robotaxi market report

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Our 2025 Tech Trends report provides a concrete roadmap for corporate leaders to navigate some of the most important technology shifts in the year ahead.

We include specific recommendations for action so that business leaders can get ahead of the next wave of value creation.

Here is a selection of key findings from the report:

• AI agents are given money to spend: AI agents’ utility is limited until they can make transactions seamlessly. A small group of tech players is building new infrastructure to make that happen.
• The future data center arrives: With data center power usage expected to more than double by 2026, big tech companies are morphing into energy innovators to support AI workloads. There’s a huge opportunity in improving data centers’ energy efficiency.
• Investment floodgates open for RNA therapeutics: RNA therapeutics developers are pioneering new ways to treat traditionally “undruggable” diseases, with a growing focus on neurodegenerative disorders like Alzheimer’s and Huntington’s diseases.
• AI M&A fuels the next wave of corporate strategy: AI’s share of corporate tech M&A has doubled since 2020. Tech incumbents like Nvidia, Salesforce, and Snowflake, as well as consultancies like Accenture, are rapidly acquiring AI startups to tap into enterprise demand. 
• Disease management enters a new phase with AI: AI is improving care delivery across 3 key areas of disease management: precise symptom evaluation; testing/screening for earlier disease detection (including before symptoms even appear); and finding at-risk individuals in datasets of entire patient populations. 
• Retail’s personalization imperative: Generative AI is unlocking 1:1 experiences across commerce touchpoints, with leaders like Target seeing a corresponding 3x boost in conversation rates. Personalization will become omnipresent in retailers’ offerings.
• And much more

Methodology

Our analysis relies on a wide range of CB Insights datasets, including financing and acquisition data, valuations, founding team and key people data, earnings transcripts, and more. We also leverage CB Insights’ proprietary scoring algorithms to measure business health (Mosaic) and maturity (Commercial Maturity), as well as the likelihood of acquisition (M&A Probability score). Throughout the report, we provide CB Insights customers with jumping-off points to dig deeper into the data behind the report.

The post 15 tech trends to watch closely in 2025 appeared first on CB Insights Research.

By 2029, SDVs could account for as much as 90% of auto production, up from just 3% in 2021, per Morgan Stanley. However, the transition comes with steep challenges, such as the technical complexity involved and the need for strong cybersecurity measures to protect connected vehicles.

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This spending is creating opportunities for growth across the AI data center value chain.

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Despite the declines, global regions like the US and Europe have made gains in median deal sizes this year, and both the US and EU continue to provide government grants and loans to climate tech solutions. China, on the other hand, has rolled back some of its clean energy subsidies, and VC enthusiasm has waned in the country this year.

Globally, governments are focusing more on early-stage technologies that are ready for commercialization. Two prime examples in the US are nuclear fusion energy and direct air capture of CO2, both of which have received substantial funding from the US Department of Energy this year.

Download the full report to access comprehensive data and charts on the evolving state of climate tech across sectors, geographies, and more.

Below, we cover key shifts in Q3’24.

• Climate tech funding falls to $4.8B in Q3’24, marking the lowest point since Q2’20. Venture capital has shifted away from the sector as high interest rates impact climate tech’s capital-intensive projects and as investors pivot toward AI, which tends to feature more rapid developments and shorter commercialization timelines.

• M&A activity drops dramatically in Q3’24, with only 43 deals completed — a more than 50% decline from the previous quarter. While notable exits like Kyte Powertech ($277M valuation) and SRE Power ($72M) suggest a steady appetite for grid infrastructure solutions, the overall slowdown signals a more selective M&A environment, potentially limiting exit opportunities for highly valued climate tech companies.

• US and European deal sizes show resilience despite the slowdown in global funding. In the US, the median deal size has reached $6M in 2024 YTD (up from $4.3M in 2023), while Europe’s median deal size has grown to $4.9M (up from $3.7M in 2023), indicating sustained investor confidence in these markets.

• Despite declines in overall climate tech funding, companies commercializing solutions in carbon capture, utilization, and storage (CCUS) continue to secure significant capital, as demonstrated by Twelve‘s $200M Series C round in September. Twelve is using the funding to finish building its Washington state facility, where it will produce sustainable aviation fuel (SAF) that it claims can deliver up to 90% emissions reduction compared to conventional jet fuel.

Source: CB Insights — Twelve Funding Insights

• Electric vehicle technology funding reaches a critical low of $0.6B in Q3’24, marking its lowest point since early 2020. However, the sector still attracted notable deals, including 24M Technologies‘ $87M Series H round at a $1.3B valuation, pointing to selective investor appetite for more mature EV tech companies.

More energy resources from CB insights:

• 5 climate tech markets gaining momentum in 2024
• The grid tech market map: The companies tackling the growing need for reliable electricity
• The energy impact of generative AI: 3 technologies transforming the future of data centers
• Analyzing 15 oil & gas leaders’ tech priorities: Here’s where incumbents are buying, investing, and partnering
• Sodium-ion batteries are poised for a breakout moment — energy players should prepare
• Why energy giants should have green ammonia on their radar

The post State of Climate Tech Q3’24 Report appeared first on CB Insights Research.

Despite these declines, $100M+ mega-rounds comprised 51% of total CVC-backed funding in Q3’24, a notable increase from a quarterly average of 37% in 2023. Meanwhile, two-thirds of CVC deals this year have gone to early-stage companies, highlighting a strategic shift toward more emerging opportunities, especially in AI.

Based on our deep dive in the full report, here is the TL;DR on the state of CVC:

• ​​Global CVC-backed funding drops 5% to $15.7B in Q3’24. Nevertheless, that figure is still the second-highest quarterly level since the beginning of 2023. Meanwhile, a 10% QoQ decline to 773 deals — the lowest total since 2018 — suggests that CVCs are increasingly selective, similar to the wider venture market.

• The average CVC-backed deal size has increased 31% so far this year to $27.1M, highlighting investors’ willingness to take risks when they find the right opportunity. However, the median deal size remains the same as last year at $8M, signaling that investors are only more aggressive regarding the largest deals.

• Funding to CVC-backed mega-rounds (deals worth $100M+) represents 51% of total funding in Q3’24. This percentage — roughly in line with the first 2 quarters of 2024 — is up significantly from an average of 37% in 2023, further suggesting that investors are currently willing to make large bets when they decide to invest.
• Early-stage rounds represent 66% of total CVC deal share this year, the highest level in over a decade. CVCs are increasingly focused on early-stage startups, likely driven by the record levels of AI funding and the fact that, across investor types, 72% of deals to AI companies this year are early-stage.

• CVC-backed funding in the US ticks up to $10.5B. Among major global regions, the US continued to lead in CVC-backed funding in Q3’24, followed by Europe at $2.6B and Asia at $1.3B. Within the US, defense tech provider Anduril raised the largest CVC-backed deal with its $1.5B Series F round (CVC investors include Franklin Venture Partners), followed by AI chip developer Groq with its $640M Series D round (backed by Samsung Catalyst).

MORE VENTURE RESEARCH FROM CB INSIGHTS

• State of CVC Q2’24 Report
• State of Venture Q3’24 Report
• State of Fintech Q3’24 Report
• State of Digital Health Q3’24 Report

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While AI deals in Q3’24 included massive $1B+ rounds to defense tech provider Anduril and AI lab Safe Superintelligence, global AI funding actually dropped by 29% QoQ. This was driven by a 77% decline in funding from $1B+ AI rounds QoQ.

Based on our deep dive in the full report, here is the TL;DR on the state of AI:

• Global AI deal count climbs 24% QoQ to reach 1,245 — its highest quarterly level since peaking in Q1’22. This bucked the trend in overall venture deals (-10% QoQ), signaling that investor interest in AI remains strong despite the broader cooling in venture markets. AI funding, on the other hand, fell by 29% QoQ to $16.8B, driven by a 77% decline in funding from $1B+ AI rounds QoQ. 

• The average AI deal size is $23.5M in 2024 so far — up 28% vs. $18.4M in full-year 2023. This upward trend has been influenced by a rise in massive $1B+ deals, with AI startups drawing 9 of these deals in 2024 so far vs. 4 in full-year 2023. Top $1B+ rounds in 2024 YTD include: 
  • xAI — $6B Series B at a $24B valuation
  • Anthropic — $2.8B Series D at an $18.4B valuation
  • Anduril — $1.5B Series F at a $14B valuation
  • G42 — $1.5B investment from Microsoft
  • CoreWeave — $1.1B Series C at a $19B valuation

These deals aren’t solely responsible for pushing up the average — the median AI deal size is up 9% in 2024 so far.

• AI unicorn births more than double QoQ to reach 13 — 54% of the broader venture total in Q3’24. Generative AI continues to be a key theme for new unicorns (private companies reaching $1B+ valuations). More than half of the AI unicorns born in Q3’24 are genAI startups, and they are working across a variety of areas — including AI for 3D environments (World Labs), code generation (Codeium), and legal workflow automation (Harvey).

Among new genAI unicorns in Q3’24, Safe Superintelligence — co-founded by OpenAI co-founder Ilya Sutskever — landed the most sizable valuation. The AI lab was valued at $5B after raising a $1B Series A round in September 2024.

• AI M&A exits fall by 48% QoQ to hit 62 in Q3’24. The deals that did occur showcase how enterprises are strategically scooping up AI startups to improve their offerings and maintain a competitive edge. For example, the largest AI M&A deal in Q3’24 was AMD’s acquisition of AI lab Silo AI, which could help the semiconductor company enhance the development and deployment of AI models on its hardware. Meanwhile, Salesforce picked up unstructured data management startup Zoomin to support its AI agent offerings.

• Among major global regions, the US continues to lead in AI funding and deals. AI startups based in the US drew $11.4B across 566 deals in Q3’24, accounting for over two-thirds of global AI funding and 45% of global AI deals. Within the US, Silicon Valley still dominates AI funding and deals, but other metros are gaining ground. In Q3’24, Los Angeles and New York saw their AI deal counts rise QoQ while Silicon Valley watched its count drop for the second quarter straight.

ADDITIONAL AI RESEARCH FROM CB INSIGHTS:

• State of AI Q2’24 Report
• State of Venture Q3’24 Report
• Game Changers 2025: 9 technologies that will change the world
• The Multi-Agent AI Outlook: Here’s what you need to know about the next major development in genAI
• Analyzing a16z’s AI investment strategy: Where the firm sees opportunity amid the genAI rush
• The AI computing hardware market map

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