The year 2024 brought significant changes to the global venture capital market, with artificial intelligence (AI) emerging as the driving force behind investments. According to CB Insights' latest report, AI is dominating venture capital, accounting for 37% of all venture funding and 17% of global deals – the highest percentages ever recorded.
The five largest venture capital rounds in 2024 were directed at AI companies, with Databricks raising $10 billion in a Series J round and OpenAI securing $6.6 billion. These figures make it clear that major tech companies and startups leading AI solution development are attracting a substantial share of capital.
However, the report also highlights a less optimistic side: the total deal volume dropped by 19% compared to the previous year, reaching 26,961 transactions – the lowest number since 2016. This decline reflects greater selectivity by investors, who are directing their resources toward areas with higher short- and medium-term return potential.
The fastest-growing tech markets revolve around AI, industrial automation, and life sciences. The application of AI in the discovery and development of proteins and other biologics is driving growth in the healthcare and life sciences sectors. This surge reflects increasing investor interest in solutions that combine AI with biotechnology, accelerating the creation of new drugs, therapies, and biomolecules.
This growth indicates that AI is not only transforming traditional sectors but also playing a crucial role in healthcare innovation, driving research that could revolutionize disease treatment and the production of new biologics. For healthtech and biotech startups in Brazil, this trend highlights a promising path to explore the potential of AI in healthcare.
For Latin America, and especially Brazil, CB Insights' report data serves as a barometer for what to expect in the coming years. Although investment volumes have declined across various sectors, some areas show signs of resilience, such as industrial automation and AI solutions applied to healthcare.
The healthcare sector, in particular, has demonstrated significant potential to leverage emerging technologies. Brazilian startups are exploring AI in applications ranging from assisted diagnostics to optimizing hospital management.
A notable example is Munai, a startup that uses AI to support mental health care and emotional well-being. Munai has developed a virtual assistant that applies cognitive-behavioral therapy techniques, helping companies monitor and improve employee emotional health. This innovation underscores how AI is becoming a fundamental tool for creating scalable and accessible healthcare solutions.
The report also highlights that 74% of AI-related deals were closed with early-stage startups, reflecting the growing appetite among investors for innovative solutions from the outset. This is a promising sign for Brazilian healthtechs in their early development phases. Interest in early-stage startups shows that, despite a more competitive venture capital environment, there is room for disruptive ideas that bring relevant solutions to the healthcare sector.
Additionally, the decreasing costs of development, driven by advancements in generative AI tools, allow startups to create products with fewer resources and leaner teams. This opens a window of opportunity for entrepreneurs looking to scale their solutions quickly, even in a tighter investment environment.
While the landscape favors early-stage startups, the report points out that companies at more advanced stages face significant challenges. Valuations for mid- and late-stage startups remain below the levels seen in 2021 and 2022, despite a slight recovery compared to 2023.
For Brazilian healthtech startups, this means that after an initial funding round, the challenge becomes demonstrating concrete results and validating their business models. Companies that can show measurable impact and build strategic partnerships increase their chances of attracting new investors during growth phases.
Acceleration programs, incubators, and partnerships with universities and hospitals have been crucial for healthtechs in Brazil. These initiatives help startups validate their technologies and access networks of investors and potential clients.
Another significant data point presented by CB Insights is the average time it takes for a startup to go public. In 2024, venture-backed companies took an average of 7.5 years from their first funding round to IPO – two years longer than in 2022. This delay reflects instability in public markets and many startups' preference to continue raising private capital while macroeconomic conditions remain uncertain.
In Brazil, no companies have gone public in the last three years, reinforcing the importance of alternative growth strategies, such as mergers, acquisitions, and strategic partnerships.
Despite the challenges, AI continues to be a powerful tool for startups seeking differentiation. The ability to analyze large volumes of data, personalize treatments, and automate processes positions startups investing in AI in a privileged spot to attract capital and grow.
In the Brazilian context, public-private partnerships and healthcare innovation hubs can play a decisive role in boosting healthtech startups. Programs like InovaHC, from Hospital das ClÃnicas at USP, and initiatives from Eretz.bio are examples of efforts to integrate AI into healthcare solutions, strengthening the innovation ecosystem.
At IBIS, we have witnessed firsthand how the convergence of biotechnology and artificial intelligence is opening doors for startups in the healthcare sector. Beyond connecting entrepreneurs to investors, we have facilitated partnerships with hospitals, universities, industries, and laboratories, creating an ecosystem that drives innovation and accelerates the growth of promising solutions. If your startup seeks to advance in this environment, there are many opportunities to explore and expand your market presence.
To access the full CB Insights report, click here.
by Marcio de Paula
Brazilian Health Innovation Institute - IBIS