Insights

FUNDING INSIGHTS AND ENTREPRENEURIAL ACTIVITY

In 2024, North Carolina experienced a remarkable surge in venture capital activity, with total funding nearly doubling (+95%) to $3.1 billion compared to $1.6 billion in 2023. This significant rebound signals renewed investor confidence, particularly within the tech sector, which accounted for over 79% of total funding. The tech sector’s impressive growth (+172%) highlights its central role in driving the state’s entrepreneurial ecosystem forward.

While the total number of deals declined slightly (209 vs. 214 in 2023), the average deal size more than doubled, rising to $18.4M in 2024 from $7.7M in 2023. This surge reflects a greater concentration of capital in larger transactions, reinforcing investor preference for scaling companies over smaller, early-stage bets. However, the median deal size declined slightly to $1.7M from $2.1M, indicating that while high-value deals pushed the average up, smaller investments still played a role in shaping the market. This trend suggests a bifurcation in the funding landscape, where capital is either flowing into large-scale, high-growth opportunities or spreading across smaller, sub-$5M deals, while mid-sized rounds remain more constrained.

Key trends shaping 2024 include:

1. Tech Sector Maintains Its Edge: The tech sector led the charge with significant deal sizes, including Epic Games’ $1.5 billion funding round, bolstered by substantial raises from CData ($350 million) and Aiwyn ($113 million).
2. Shifting Investor Dynamics: Institutional investor activity saw a modest decline, with 273 investors participating, down from 317 in 2023. However, out-of-market investors, such as Deerfield Management and Techstars, played a notable role in fueling growth.
3. Life Sciences Resilience: Though funding in life sciences slightly declined (-2% YoY), the sector secured high-profile deals, such as Pathalys and  Areteia, emphasizing North Carolina’s enduring leadership in this domain.
4. Advanced Manufacturing and Makers Slowdown: These sectors faced significant contraction in both funding and deal count, reflective of shifting investment priorities amid macroeconomic headwinds.
5. Exits Concentrated in M&A: Exit activity was robust with 60 mergers, acquisitions, or buyouts, though IPOs/SPACs were absent, mirroring broader trends in the capital markets.

Despite challenging global market conditions, North Carolina’s entrepreneurial ecosystem has demonstrated its resilience and adaptability. The state’s consistent performance above the $1 billion funding threshold and its growing appeal to national and international investors underscore its maturity and competitiveness as a venture capital hub. As 2024 concludes, the foundation is set for continued growth and innovation in the years ahead.

To see our 2024 Top 10 Takeaways, Company Exits, and more, check out the Venture Report.

Data for this report was gathered by CED’s Accelerate team, and the report was written by Yash Mehta, Connect to Capital Lead. Congrats to Yash on an incredible effort for authoring his first Venture Report.