Despite the infusion of $74.6 billion into US startups in Q4 2021 – a notable hike from the previous nine quarters’ average – securing funds is still a steep climb for many startups, data reveals.
Venture capital (VC) funding soared to nearly $75B in the fourth quarter of last year, reminiscent of funding levels during the ZIRP-era zenith. However, a deeper analysis indicates a selective gain, with a small number of businesses benefiting the most.
Nearly 43.2% of Q4’s funding, equivalent to $32 billion, was allocated to just a handful of mega-deals. Companies at the receiving end included Databricks, OpenAI, xAI, Waymo, and Anthropic, all of which secured billion-dollar deals.
Minus these massive deals, Q4’s investment activity would resemble the preceding two-year average of $42 billion. It underlines the growing funding gap between a select group of well-backed firms and the wider startup landscape.
As the industry awaits to see whether 2025 will maintain the high VC investment trend seen in Q4 2021, it’s apparent most of the VC funding will probably remain concentrated towards a small batch of promising AI companies.
Original source: Read the full article on TechCrunch
