The venture capital industry is undergoing a dramatic concentration of power and resources. It’s happening across funds, stages, sectors, and geographies.
In 2024, the top 30 VC firms dominated the market, securing 75% of all U.S. venture capital fundraising, with just nine leading firms capturing half of the total raised. Andreessen Horowitz emerged as a particular powerhouse, raising more than 11% of all VC funds.
This represents a fundamental shift in venture capital’s structure. The industry has evolved from a diverse ecosystem of boutique firms (by the end of 2023, the U.S. VC ecosystem had 3,417 VC firms) to one dominated by mega-funds offering comprehensive support services to startups. These leading firms have expanded beyond traditional investment roles to provide marketing, recruitment, and other operational support, justifying their increasingly large fund sizes.
The trend toward mega-funds has accelerated significantly, with the number of billion-dollar-plus funds in the U.S. more than tripling from 10 in 2019 to 35 in 2022. The AI boom has further fueled this consolidation, as large language model development requires substantial ongoing capital investment. These mega-funds are increasingly backed by sovereign wealth funds and public pensions.
In 2024, 30 firms raised 75% of all capital raised by VC funds in the US, a powerful signal of how the tech pullback is concentrating influence among the venture industry’s heavyweights.
Pitchbook
Meanwhile, smaller and emerging VC firms face mounting challenges. In 2024, firms outside the top 30 collectively raised only 14% of total commitments, a total of $9.1 billion, with first-time fund managers particularly struggling to attract institutional investors. This has created a two-tier system where established firms have access to major institutional investors, while newer players must rely primarily on high-net-worth individuals and wealth managers for funding. Perhaps a bright point in this regard is that high-net-worth individuals and wealth managers are stepping into this void, presenting potential opportunities for emerging managers
Sector concentration: AI
Globally, The AI sector dominated venture capital investment in 2024, attracting approximately one-third of global venture funding and reaching over $100 billion – an 80% increase from 2023’s $55.6 billion. This level of AI investment surpassed all previous years, including the record-setting year of 2021.
This AI-driven investment surge is fuelled by the potential for rapid scalability, high margins, and industry disruption. 2024 was very exciting in terms of AI innovation, but also, started sowing doubts on how scalable LLMs are, the electricity requirements needed to satisfy the vast use of AI, increased copyright lawsuits and uncertainty about regulation. Another challenge for startups is that big team is leaning in on AI, big time.
Geo concentration: Silicon Valley remains king
Startups in Silicon Valley secured $90 billion in venture capital investment in 2024, accounting for 57% of global venture funding. This dominance is attributed to the region’s strong AI presence, access to Big Tech, and established startup infrastructure.
Perhaps not surprising, given that the Bay Area also boasts the highest concentration of skilled tech employees, with 49% of all Big Tech engineers and 27% of startup engineers based there, making it an attractive location for founders.
Stage concentration: the return of Growth funding
It’s worth mentioning that overall, the global venture deal volume in 2024 reached an eight year low. Late-stage funding dominated Q4 of 2024, increasing by over 70% compared to the previous quarter and exceeding the amount invested in Q4 of 2023. This surge was fueled by an increase in billion-dollar rounds across multiple sectors, namely AI.
In 2024, Series A financing rounds decreased, while Series B and C rounds saw an increase. Mega-funds are leading larger rounds, particularly Series A and B rounds, rather than participating in more rounds, which likely contributes to the decrease in Series A volume.
Here’s a more detailed look at the stage concentration trends:
- Series A rounds declined by 4.9% between 2023 and 2024. This decline comes despite the rise of AI, which would typically drive an increase in Series A volume. The median round size for Series A financing increased from $12 million to $15 million, indicating a shift toward larger deals.
- Series B rounds grew by 9.1%, and Series C rounds increased by 17.2% between 2023 and 2024. This growth is likely due to the resurgence of public markets. The median round size for Series B financing jumped from $26.6 million to $32.3 million.
Looking ahead to 2025
The venture capital landscape of 2024 painted a clear picture: capital is concentrating in later stages, mega-funds, and AI, primarily in Silicon Valley. While this may seem daunting for a smaller pre-seed fund like Remagine Ventures, we see 2025 as a year of opportunity.
Here’s why:
- The IPO market is expected to reopen. This could lead to a positive chain reaction, with capital flowing back to LPs, potentially increasing their appetite for venture investments across all stages. A more active exit environment could benefit even the earliest-stage companies as successful exits at later stages encourage more investment across the entire ecosystem.
- The expected reduction in red tape from the Trump administration could fuel a surge in US-based startups. This shift in policy, aimed at increasing competitiveness, may create a more favourable environment for early-stage companies, particularly in sectors like AI, where the US aims to maintain its global leadership.
- While mega-funds focus on billion-dollar AI deals, a vast, underserved market remains. We believe that specialised, pre-seed funds with deep domain expertise can capitalise on this by identifying promising startups in niche AI segments and other emerging technologies. Our focus allows us to build a robust network of technical experts and researchers, giving us a unique edge in sourcing and evaluating early-stage companies that may be overlooked by larger funds.
- Smaller, specialized funds offer a crucial path to diversification in the venture capital landscape, particularly as capital concentrates in mega-funds and later-stage companies. These funds, with their niche expertise and early-stage focus, can invest in a wide range of sectors and technologies often overlooked by larger funds.
2025 won’t be without challenges. Competition for promising pre-seed startups will remain fierce, but we are confident that our strategy, combined with a recovering market and the price arbitrage between Israel and the US in pre-seed, positions us well to identify and nurture the next generation of innovative, category-defining companies.
I'm a former general partner at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google's first physical hub for startups.
I'm also the founder of Techbikers, a non-profit bringing together the startup ecosystem on cycling challenges in support of Room to Read. Since inception in 2012 we've built 11 schools and 50 libraries in the developing world.
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