(Bloomberg) -- Venture dealmaking hobbled along at a slightly better pace than a year ago in dollar terms, but cash went to a relative handful of companies, underscoring the increasingly selective spending in the sector.
There were an estimated 3,777 U.S. deals for $37.9 billion in the third quarter, about an 8% uptick in the value of the transactions compared with the year-earlier period, according to data released Thursday by Pitchbook.
“Stronger companies raising capital are receiving larger deals to help weather the market slowdown,” wrote analysts Kyle Stanford and Nalin Patel in an email accompanying the data.
OpenAI’s latest fundraising bodes more of the same for the current quarter. The startup announced Wednesday that it raised $6.6 billion at a valuation of $157 billion. The deal “highlights the vast capital resources that AI is consuming,” Stanford wrote. “We have seen quarter after quarter of AI companies commanding a large portion of total dollars for the VC market, and raising deals with significantly higher valuations than are being raised in other sectors.”
In the first nine months of 2024, artificial intelligence has accounted for 36% of the total US deal value, and 27% of US VC deal count, Pitchbook said.
Most venture-backed companies remain stuck in the private markets, with only $11.2 billion in activity stemming from initial public offerings or acquisitions. That is the lowest since the second quarter of last year, and well off the totals of around $200 billion quarterly in most of 2021. Just 10 startups listed on the public markets last quarter.
The poor market has delivered lackluster distributions for investors in venture funds, making it harder for the firms that run them to raise more cash. So far this year, only 380 new funds totaling $65.1 billion have been raised, putting the industry on track for another weak year in fundraising.
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