VC Landscape in 2024
Global venture funding in 2024 surpassed 2023 levels, reaching approximately $314 billion compared to $304 billion the previous year, marking a 3% increase, according to Crunchbase data. AI saw the most significant year-over-year growth in funding among sectors. While 2024's total exceeded pre-pandemic levels seen in 2019, it remained below the peak amounts of $346 billion in 2018 and $350 billion in 2020.
Year of AI
2024 was a breakout year for AI funding, with AI companies receiving over $100 billion, accounting for nearly one-third of global venture funding and marking an 80% increase from $55.6 billion in 2023. This total exceeded all previous years in the past decade, including the peak funding year of 2021. Almost one-third of AI funding went to foundation model companies, while the rest targeted sectors influenced by these models, such as infrastructure, autonomous driving, healthcare, robotics, professional services, and security and military applications. Notably, several record-breaking deals in 2024 contributed to these totals, as highlighted in Crunchbase’s analysis of the largest AI startup funding deals of the year.
Defence
In 2024, defence tech reached significant traction from VC investors globally, driven by ongoing war in Ukraine and conflicts in the Middle East and heightened geopolitical tensions. Governments increasingly partnered with defense tech companies, particularly those offering AI-enabled solutions. While defence tech startups historically faced funding challenges due to stigma, recent quarters have seen a shift, with several companies successfully raising major rounds and niche funds emerging to focus specifically on defence tech investments.
Outlook
According to the KPMG Venture Pulse, optimism is growing for a rebound in global VC investment heading into 2025, driven by potential interest rate reductions, improving market conditions, and a reinvigorated IPO market following successful listings like Reddit and Rubrik. The report highlights AI as the dominant sector for VC funding, with investments expanding into areas such as industry-specific solutions and AI-enabled robotics, largely supported by corporate players. Additionally, sectors such as defense tech, healthcare and biotech, cybersecurity, and alternative energy are expected to maintain strong investor interest.
SaaS Companies in Q4 2024
Public SaaS companies have shown mixed performance, with the BVP Nasdaq Emerging Cloud Index revenue multiple amounting to 6,86 x annualized revenue at the end of 2024- up 10% compared to end of Q3 and 6,5% compared to 6,44x at the end of 2023.
About CEE SaaS Index
CEE SaaS Index is a simple tool for startups and investors to value SaaS companies in Central & Eastern Europe based on revenue multiples from publicly traded SaaS companies from the CEE region, developed by Vestbee and Warsaw Equity Group.
While revenue multiples from publicly traded SaaS companies can provide a helpful starting point for valuation, currently available indexes are only based on US-listed SaaS companies, leaving the CEE region without relevant benchmarks, despite the region's thriving startup ecosystem and quadrupled VC funding over the last three years.
With projected growth and increased investment in CEE tech companies, a more appropriate valuation benchmark for regional startups and investors is required. To meet this need, Vestbee and the Warsaw Equity Group have collaborated to develop the CEE SaaS Index, providing a relevant benchmark for regional and international investors.
Key updates on CEE SaaS Index performance for December 2024 include:
- The median CEE revenue multiple at the end of Q4 2024 increased to 3,28x annualized revenues (3,21 at the end of Q3 2024), and decreased YoY (3,4 at the end of 2023)
- Market capitalization of all companies included in the CEE SaaS Index remained stable at circa. €2 billion as compared to the end of Q3 2024 and up 15% since the beginning of the year (€1.75 billion at the end of 2023).
- For comparison, the median US revenue multiple at the end of Q4 2024 amounted to 6,86x annualized revenue — up 6,5% compared to 6,44x at the end of 2023
- US multiples, which, contrary to the CEE ones, have grown over the last year, are now 109% higher than CEE multiples (up from 90% at the end of 2023).
- CEE-based companies are growing slower than their US counterparts — 9,3% vs 15% YoY median revenue growth rate.
