Although VCs are investing $75B in Q4, it’s hard for startups to raise money, data confirms

After two years of investment-changing work, it seems that VCs are once again pouring in startups during the pandemic. But a closer look shows that it is not true.

In the fourth quarter of last year, investors added $74.6 billion to US startups, a sharp increase from the average of $42 billion invested in each of the previous nine quarters, according to the More about PitchBook released on Tuesday.

Although this investment was previously seen during the ZIRP period (late 2020 to 2021), the reality is that the recent increase in corporate investment is benefiting a number of selected companies. Instead, $32 billion, or 43.2% of Q4’s revenue, was invested in a very limited amount:

Data Materials: In December, the data analysis company raised $10 billion at a valuation of $62 billion.

OpenAI: The ChatGPT developer is protected $6.6 billion at a cost of $ 157 billion in early October.

xAI: Elon Musk’s xAI which is developing an AI startup called Grok, which has arrived. $6 billion from investors in December.

Waymo: A self-driving car maker that operates robotaxi services in San Francisco, Los Angeles and Phoenix has secured protection. $5.6 billion Series C in November led by parent company Alphabet and joined by Silicon Valley companies.

Anthropic: In November, the AI ​​brand developer upgraded $4 billion from Amazon.

Without these megadeals, Q4 business activity would have mirrored the past two years of $42 billion. The rise in venture capital highlights the widening gap between a small number of high-income companies and the traditional start-up approach.

Whether 2025 will see a continuation of the high business activity seen in Q4 of last year remains to be seen. However, the majority of venture capital will likely continue to flow to a small group of the most promising AI companies.