VC megadeals are booming – and AI isn’t a particularly high-profile category

Ask any VC if we are still in a venture capital bear market and that investor will surely tell you no, that funding is still flowing to good companies.

That may sound like a turn-off, because there are many anecdotes about how difficult it is for those who are growing up now. And for good reason. Low rounds — that is, raises at a lower rate than the previous round, which founders want to avoid unless they have no choice — were at their highest during the first half of 2024, according to Aumni’s Venture Beacon report. About 39% of the late deals were of low quality, according to Aumni’s report. That includes Series B and beyond, with a much larger percentage of lower rounds in Series C and beyond.

Even Stripe — whose success no one questions — hasn’t quite reached its 2021 $95 billion estimate as the second largest project in July. Although it rose back to $70 billion during that time.

But despite this kind of gloom, the latest figures for 2024 are full of good news, too. For example, new data from Crunchbase shows strong growth in mega deals – funding rounds of $100 billion or more.

Crunchbase has tracked nearly 240 mega rounds of US-based startups so far this year, which is already more than the 210 raised last year.

Most interestingly, Crunchbase’s top tier of these deals wasn’t AI. Biotech and healthcare startups accounted for 87 mega deals, compared to 26 for second-tier AI.

Some of these cycles are acknowledged: companies working on AI in healthcare. For example, Crunchbase cites AI drug discovery company Xaira Therapeutics as one of its notable healthcare megadeals. Xaira was launched in April with a massive $1 billion round led by ARCH Venture Partners and Foresite Labs (both known for biotech), but with old Silicon Valley VCs in the round, too, such as NEA, Sequoia Capital , Lightspeed Venture Partners, SV Angel and others.

We can call Xaira an AI company, and include it in our ongoing list of AI megadeals.

But there were also deals like Superluminal Medicine’s $120M Series A, led by Eli Lilly. Although it also uses machine learning to accelerate drug development, it focuses on drug discovery of small molecule receptors on cell membranes. That’s the hot spot in biotech right now – no AI wash required. The deal is backed by veteran tech investors Insight Partners and Gaingels, as well as NVentures (NVIDIA’s venture capital arm), which seems to be everywhere these days.

Other Biotech Series A and B megadeals include a $120 million Series B closed by Terray Therapeutics, which works with small molecule drugs; and the $100 billion Series A Judo Bio stayed to deal with kidney drugs. A new biotech mega deal seems to be announced every week.

Aside from health technology and AI, another sector holding big rounds is cybersecurity, with 16 such deals so far this year. Examples include email security startup Kiteworks raising $456 million, data security startup Cyera raising $300 million, and cloud security startup Wiz raising a total of $1 billion.

There are also a few other signs of founders’ goods in the earlier stages. Pre-fund valuations improved slightly for seed and Series A deals in the first half of the year, Aumni found.

2024 trades also appear to be at the same level as 2023, according to the Q3 PitchBook-NVCA Venture Monitor. In 2023 it entered under 16,000 contracts, which was slightly higher than the average annual activity before the pandemic and the ZIRP chaos of 2020-21.

For those interested in learning more, TechCrunch Disrupt 2024 will host a session on the Builders Stage titled “What You Need to Raise a Series A Today” and another “How to Raise in 2025 When You Take a Flat, Floor, or Expansion Round.”