State of Private Markets: Q4 and 2024 in review
State of Private Markets: Q4 and 2024 in review
Authors:
Ashley Neville, Kevin Dowd
Read time:
14 minutes
Published date:
February 12, 2025
The startup fundraising landscape is undergoing a clear resurgence from the post-pandemic slowdown. Carta has all the data, including trends in round sizes, valuations, dilution, and more, across every stage and every region of the U.S.
Executive summary
In terms of pure dollars and cents, the venture fundraising landscape of 2024 was a tale of two markets.
In the early-stage market, fundraising activity pulled back slightly from the year before, even as median valuations ticked up. Seed-stage startups on Carta raised 12.5% less capital in 2024 than they did in 2023. At Series A, capital raised decreased by 6.7%.
In the middle- and late-stage markets, on the other hand, 2024 was a year of recovery. Capital invested at Series B rose by 17.3% last year. Series C startups raised 41.8% more capital than the year before, while Series D saw a 78.8% spike.
Back in 2022 and 2023, these more-mature companies felt the sharpest pains from the post-pandemic slowdown in fundraising activity. In 2024, they experienced what could be the beginnings of a resurgence.
And if we take the market as a whole, the impact of this resurgence is clear. Across all stages, startups on Carta combined to raise $89 billion in new funding in 2024, an 18.4% increase from 2023.
Q4 highlights
Seed valuations rose to new highs: The median pre-money valuation across both primary and bridge rounds at the seed stage climbed to $16 million in Q4, the highest quarterly figure dating back to at least 2016. Competition among investors to gain access to the most appealing early-stage investments remains fierce.
Dilution declined at most stages: The median dilution level on new funding rounds decreased in Q4 at every major fundraising stage except for seed, where it held steady. At some stages, the landscape has changed considerably: Median dilution on Series B rounds was 15% in Q4, compared to 18.6% a year earlier.
Startup M&A became more common: Startups on Carta were the target in 642 M&A transactions during 2024, the highest annual total of the past six years. Amid a slower exit environment, some companies are still finding ways to generate liquidity for their shareholders.
Key trends
Startups on Carta raised 18.4% more capital in 2024 than in 2023, and they did so on 7.3% fewer total rounds. This combination of more cash on fewer transactions means that the average venture round size got bigger: $15.5 million last year, compared to $12.1 million the year prior.
While this average isn’t indicative of a typical round size at any one stage, it does demonstrate that larger funding events are once again growing more common across VC as a whole. This is particularly true in AI, where startups continue to raise tens or sometimes hundreds of millions of dollars to invest into building their bespoke models and other cutting-edge technologies.
Total round count and dollars raised will likely increase in the weeks to come, as startups continue to log recent transactions on Carta. For now, however, fundraising totals from 2024 look quite similar to the final numbers from 2019, in terms of both deal count and cash raised.
In most cases, when a startup raises a new round of venture funding, its valuation goes up. Over the past two years, however, raising capital at a decreased valuation—what’s known as a down round—has become more common. In Q4, 19% of all new investments on Carta were down rounds, roughly in line with figures over the past two years.
This increase in the proportion of down rounds is largely a function of the reset in venture-backed valuations that began in 2022. Many of the companies that raised capital in 2024 had raised their previous round in a pre-2022 environment, when VCs tended to be more optimistic in determining startup valuations. Faced with a more skeptical fundraising environment, some of these companies have had little choice but to accept a reduced valuation if they want to bring in new capital.
At the seed stage and Series A, venture fundraising activity declined last year in terms of both dollars raised and total rounds. At Series B, Series C, Series D, and Series E+ the opposite is true: At each stage, startups closed more rounds and raised more capital in 2024 than they did in 2023.
In some cases, the increases were steep. Annual cash raised rose last year by 41.8% at Series C and by 78.8% at Series D. The biggest increase came at Series E and beyond, where annual cash raised rose by 82%. This trend is likely influenced, at least in part, by market exit conditions, as more late-stage companies choose to remain private and secure additional funding—whereas in previous years, many would have already gone public through an IPO.
Seed startups on Carta combined to raise $1.8 billion in new funding during Q4 2024 across 507 total rounds. The first number represents an 18% decline compared to Q4 2023, and the second a 26% year-over-year drop. By both metrics, the market for seed funding seems to have slowed in 2024.
The same trends are unfolding at Series A. There, total cash raised fell 13% in Q4 2024 compared to the same period a year earlier, while deal count was down 18%. For now, Q4 2024 looks like the slowest Q4 for Series A activity dating back to at least 2018.
After falling to a recent lowpoint at the end of last year, Series C fundraising showed signs of recovery in 2024. Startups on Carta raised $3.5 billion in total Series C funding during Q4 2024, up 59% year over year, while deal count was up 34% over the same span.
While deal activity has been on the rise at Series C, it’s been holding steady at Series B. In Q4, Series B startups on Carta raised $4.4 billion in combined funding, down 2% year over year, and they closed 193 total rounds, a year-over-year increase of 4%.
Startups closed 60 new Series D rounds on Carta during Q4, the highest quarterly figure since Q4 2021. And those 60 rounds combined to raise $3.9 billion, the highest quarterly cash total since Q1 2022. Series D deal count was up 62% compared to the prior Q4, and cash raised was up 77%. By either measure, the Series D market is surging.
At the latest stages of fundraising, activity remains tepid. Total cash raised at Series E and beyond has landed below $2 billion in seven of the past eight quarters, a drop of more than 80% from Q4 2021, when the late-stage funding market was near its recent peak.
On primary funding rounds, it’s less common today than it was two years ago to see term sheets that include either liquidation preferences higher than 1x, participating preferred shares, or cumulative dividends. The change is particularly stark for participating preferred stock. In Q1 2023, an investor received participating preferred shares in more than 10% of all new primary rounds on Carta. By Q4 2024, that rate had declined by more than half.
The median pre-money valuation on primary funding rounds increased over the course of 2024 at every stage from seed through Series C. The lone exception to this upward trend occurred at Series D, where the median pre-money valuation on primary rounds fell 11% from Q4 2023 to Q4 2024.
The number of new primary rounds decreased over this span at both seed and Series A, including a 36% drop-off in activity at seed. At later stages, however, deal counts have increased since the end of 2023—the later the stage, the larger the increase. There were 60% more primary rounds at Series D in Q4 2024 than there were in Q4 2023.
The median amount of cash raised in new bridge rounds declined between Q4 2023 and Q4 2024 among startups at seed, Series A, and Series B. The size of bridge rounds ticked up, however, at Series C, with a 10% year-over-year increase.
The median pre-money valuation increased throughout 2024 on both primary seed rounds and bridge rounds raised by seed-stage companies. Across both transaction types combined, the median valuation hit $16 million in Q4, a 22% increase year over year.
On the other hand, Q4 brought a 26% year-over-year decline in seed-stage deal count, with 507 transactions taking place during the last three months of 2024. The bulk of this decline came in primary rounds, rather than bridge rounds: Primary deal count on its own was down 36% year over year in Q4, compared to a more modest 6% decline in bridge deal count.
For the full year 2024, about 40% of all venture rounds raised by seed-stage companies were categorized as bridge rounds. That was an increase from 2023, when 36% of investments at the seed stage were bridge rounds.
At later stages of startup life, however, bridge rounds grew less common in 2024 compared to 2023. At Series A, the rate of bridge fell from 40% to 38%. At Series B, the rate dipped from 35% to 30%. And at Series C, it declined from 33% to 26%.
Methodology
Carta helps more than 45,000 primarily venture-backed companies and 2.4 million security holders manage over $3.0 trillion in equity. We share insights from this unmatched dataset about the private markets and venture ecosystem to help founders, employees, and investors make informed decisions and understand market conditions.
This study uses an aggregated and anonymized sample of Carta customer data. Companies that have contractually requested that we not use their data in anonymized and aggregated studies are not included in this analysis.
The data presented in this private markets report represents a snapshot as of December 31, 2024. Historical data may change in future studies because there is typically an administrative lag between the time a transaction took place and when it is recorded in Carta.