As we close out the year, we have a revealing look at the state of enterprise investing. While capital flows rebounded sharply, the underlying dynamics point to a market increasingly defined by concentration, bifurcation and outsized bets on a select few winners.
Here’s a preview of the December 2024 market memo:
- Capital surged, but deals slowed: VC investment reached $43B in December, up 33% month-over-month, even as deal count dropped to 1.5K, the lowest level in over two years.
- Enterprise software roared back: Sapphire’s core sectors saw $25B across 591 deals, up 147% MoM and 301% YoY in capital despite fewer deals.
“Ultra-rounds” defined the year-end. Five of the 10 largest VC deals ever happened in the last four months of 2024, signaling a new era of multi-billion-dollar financings. - Deal concentration reached new highs: The top 20 enterprise software deals accounted for 31% of capital, with four companies alone driving over 20%.
- Public markets outperformed. The S&P 500 rose 23% and the Nasdaq gained 29%, with the Mag 7 contributing the bulk of returns.
- Software stocks rebounded in H2: After a weak first half, software indices rallied to end the year strong, with SaaS and enterprise software up 21% and 20.7%, respectively, in H2.
- Churn continued under the surface: Despite headline gains, deal count fell 24% YoY, flat/down rounds remained elevated, and multiple startups shut down.
Despite a sharp rebound in capital deployment and strong equity performance, the year ended with growing concentration and lingering fragility. The enterprise market is showing signs of recovery—but it’s being driven by a narrowing set of companies and categories.