INTRODUCTION Contributed by: Carsten Berrar, Florian Späth and Heiko Blaut, Sullivan & Cromwell LLP
Sullivan & Cromwell LLP Neue Mainzer Straße 52 60311 Frankfurt Germany
Tel: +49 69 4262 5200 Fax: +49 69 4272 5210 Email: berrarc@sullcrom.com Web: www.sullcrom.com
Global Overview 2025 After the record year of 2021, the global venture capital (VC) industry and the ecosystem encom - passing growth companies have been subjected to profound transformations, marked by shifts in key metrics such as elevated discount rates impacting company valuations, a decline in suc - cessful exits, and an uptick in investor-friendly deal terms coupled with a surge in bridge financ - ing arrangements. In 2024, most of these chal - lenges persisted as holdovers, with significant elections in a number of major jurisdictions and geopolitical tensions keeping uncertainty at ele - vated levels throughout much of the year. VC investors continued to be selective with their investments, focusing primarily on more mature ventures and companies with clear paths to prof - itability. Overall, however, the global VC indus - try saw a modest year-on-year (YoY) rebound in 2024. The VC industry and its portfolio companies have evolved to become a shaping force in and for the global economy. Total VC investment vol - ume in 2024 amounted to USD368.3 billion on a worldwide basis, marking a moderate gain from the previous figure of USD345.7 billion (in 2023) and a slight recovery from 2023’s five-year low. A total of 35,684 VC-related transactions affecting growth companies globally – including financing
rounds, M&A deals, and IPOs – amounted to a further 5.6% decline from the 37,809 transac - tions recorded in 2023. Early stage financing continues to dominate in terms of absolute transaction figures, account - ing for 69% of all deals. On the other end of the life cycle, total exit value came down even fur - ther to USD318.5 billion compared to USD335.1 billion of the preceding year, perpetuating an environment where liquidity events are rare. Median deal sizes across Series B, C, and D+ rounds rose substantially in both the Ameri- cas and Europe compared to 2023, with D+ financings rising the most from USD60 million to USD100 million in the Americas and from USD59.4 million to USD80 million in Europe. Unicorn VC deal flow likewise appreciated sig - nificantly to USD119.8 billion in 2024, up from USD84.5 billion in 2023 – with a total of 1,249 active start-up companies now valued at more than USD1 billion globally. In terms of geographical distribution, the USD204.3 billion deployed in North America again led the way, followed by Asia (USD64.7 billion) and Europe (USD63.8 billion) which saw opposite trendlines in terms of YoY develop - ments (deceleration in Asia; pick up of activity
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