Insights

Venture capital fundraising in the U.S. bounced back in 2024, with more than $209 billion in total investments.

According to data released in the latest PitchBook-NVCA Venture Monitor, this annual total marks a 29% increase from the prior year, which signals that the worst-case scenario, from a fundraising standpoint, has likely passed for startups.

While U.S. fundraising totals remained relatively consistent throughout the first three quarters, they reached almost $75 billion in the fourth quarter, which accounted for 36% of annual activity.

More importantly, however, is that the $75 billion in fundraising marked the highest quarterly total raised since the second quarter of 2022. In fact, the most recent fourth quarter was only the fourth time that quarterly deal volume surpassed $50 billion between 2022 and 2024.

The uptick in deal volume was largely driven by fundraising totals in California.

More than $114 billion was raised in the Golden State in 2024, which marks an increase of 50%, or $38 billion, from the prior year. Much of this increase occurred in the Bay Area, with the San Francisco, San Jose and Oakland markets capturing $97 billion worth of fundraising in 2024, an increase of 67% year over year. Los Angeles, on the other hand, witnessed a 13% decline in fundraising from the prior year.

Other states that outperformed include New York, which witnessed an annual increase of 24%, or $4.7 billion. North Carolina and Washington, D.C., both witnessed investment double over the previous year, with annual gains of 100% and 135%, respectively. Colorado, which witnessed the fifth-most investment of any state, saw an annual fundraising increase of 32%, or $1.2 billion, from the prior year.

While signs are positive, it's likely that a recovery will take some time. This is because deal totals actually declined year over year in 2024 by 6.3%. Additionally, the amount raised in the fourth quarter was driven by a select few artificial intelligence companies. Of $75 billion in deal volume raised, 43% can be attributed to the five largest deals, which include Databricks, OpenAI, xAI, Waymo, and Anthropic.

Regardless, it's easier today for tech startups to source capital compared to a year ago, which is good news for the office sector, and it's clear that investors are behind the AI movement, which is good news for data center operators.