We are living in historic times. Autonomous vehicles are already on the roads. Humanoid robots may soon inhabit our homes. Flying cars, known as eVTOLs, are imminent. And AI is changing everything. The truth, though, is that we are always living in historic times. As the ancient Greek philosopher, Heraclitus, wisely said: “No man ever steps in the same river twice. For it’s not the same river and he’s not the same man.”
The same can be applied to venture capital and technology. The river of innovation and entrepreneurship is constantly changing. And as supporters, investors, and users of this technology, we are constantly evolving, too.
In last year’s Annual Report, we noted a sense of renewed optimism in the venture capital industry going into the end of the year. We posited that the worst was likely behind us in terms of deal activity and market sentiment, and wondered whether this optimism would translate into increased investment activity in 2024. Looking at our own deployment, which as a rules-based co-investment fund mirrors the broader market, we can now say with certainty that it did.
The fourth quarter (Q4) of 2024 marked our third-most active quarter in terms of capital deployment in history, behind the record-breaking Q4 2021 and Q2 2022. We deployed ~$20M across 13 new investments, bringing our annual total to 34 investments spanning geographies and industries. This cemented 2024 as our third-most active deployment year since inception, only behind 2021 and 2022.
Driving the optimism is improved clarity around the economy, interest rates (trending downward), and the election. While these are US-centric dynamics, the effects are felt worldwide. The stock market keeps climbing higher, and crypto is benefitting from anticipated pro-crypto regulatory changes, with Bitcoin crossing the $100,000 in December 2024. Risk appetite across asset classes appears to be growing.
In addition to increased investment activity, we experienced increased liquidity going into the year-end. Following a prolonged lull in venture-backed exits — Endeavor Catalyst went 16 months without any major exit events — we are now witnessing multiple companies preparing to IPO and a reinvigorated M&A landscape.
We have also seen rising demand in secondary sales, as evidenced by transactions such as Insider’s $500M Series E round that included a large secondary component. Against this backdrop, companies are weighing their exit opportunities, choosing the path that aligns most closely with their goals and offers the best potential outcome over time.
Since inception, we have invested over $360M in 340+ companies across 34 countries, helping to advance Endeavor’s mission to build thriving entrepreneurial ecosystems around the world. Our unique vantage point and robust data set surfaces valuable insights on the venture capital industry globally. With 600+ team members on the ground across our markets, we have a front-row seat to the globalization of venture capital and innovation.
At Endeavor Catalyst, we’ve observed a pattern over the years that regional ecosystems around the world produce successful companies in specific industries during sequential phases of their development. In other words, the types of companies that thrive in a given region evolve over time as the ecosystem itself matures. Companies must solve more fundamental problems of digitization and infrastructure before they can move on to tackling critical industries or broadening their impact — like Maslow’s Hierarchy of Needs but for technology.
This framework — initially with three waves — emerged by looking backward at the growth of Latin America and then at other regions where we have operated over several decades. This also applies if you look at China and India through the same lens, for example. In 2024, we added a fourth wave: frontier technology.
Benjamin Njenga & Eli Pollak
Kenya
A financing provider for small-scale farmers.
Each region navigates these waves at its own pace, unlocking opportunities for transformative innovation and growth. And while this framework is neither perfect nor prescriptive, recognizing these varied trajectories offers an inside-view into what companies may arise next, and what the venture capital industry can expect.
AI continued to attract significant venture funding and household attention in 2024, as it increasingly moved beyond the hype to deliver demonstrable value. Since Endeavor Catalyst’s inception over a decade ago, the number of AI-implementing companies in our portfolio — which incorporate AI into their processes — has dramatically increased. This proliferation is mainly attributed to growth in sectors such as cybersecurity, business intelligence & process optimization, and lifelong learning.
Unlike the internet revolution, which began with consumer markets, the practical application of AI is now primarily seen in enterprise settings. As of 2024, 89% of our AI portfolio companies are focused on B2B solutions including companies like digital learning platform Go1 (South Africa) and security tech Alcatraz AI (Bulgaria). Rising customer acquisition and computing costs, regulatory uncertainty, and intense competition from big tech pose significant challenges for consumer-focused AI startups, currently making up 11% of our AI portfolio. That said, high-potential consumer companies such as edtech platform Noon Academy (Saudi Arabia) and AI assistant LuzIA (Spain) reveal growth opportunities as founders carve out unique market positions.
Since 2017, we have increasingly invested in AI-native companies, which place AI at the heart of their business and operate on proprietary algorithms. The number of AI-native companies in our portfolio has tripled since 2017, fueled by sectors including IT & DevOps.
In addition to IT & DevOps, we have also seen the specialization of AI in other industries including food & beverage and biotech.
As AI proliferates, we see talent everywhere shaping the future of this technology. Latin America and Europe stand out as key AI hubs in our portfolio with favorable government initiatives and numerous success stories.
In 1997, Endeavor set out to build entrepreneurial ecosystems beyond Silicon Valley. We take for granted today that this was a deeply contrarian undertaking at the time. Consider Latin America — our largest market, both in terms of invested capital and number of investments — where the word for entrepreneurship did not even exist. A proud moment came when “empreendedorismo” was added to the Brazilian dictionary in 2007 and popularized, largely thanks to Endeavor’s efforts in the region.
In nearly three decades, Endeavor has witnessed the democratization and globalization of innovation and venture capital as entrepreneurial ecosystems have proliferated globally. Take $1B+ companies as a proxy for entrepreneurial success. In 2013, when Aileen Lee first wrote about “unicorns” — coining a new term for a $1B+ VC-backed company— there were only 39 unicorns in the world. All of them were in the United States and nearly 70% were in Silicon Valley.
Fast forward to today, and there are more than 1,300 unicorns in the world and only half of them are in the United States. 37% are claimed by the other five top global VC markets (China, India, Germany, UK, Israel), with the balance in “elsewhere markets” where Endeavor operates.
This slice of the pie — nonexistent just a decade ago — is growing steadily. While reaching unicorn status is no guarantee of a great outcome, what is guaranteed is the impact these companies are having on local startup communities and entrepreneurial dynamism, which our friend, Alex Lazarow, often writes about.
At Endeavor Catalyst, we’re proud to be among the most prolific unicorn investors in “elsewhere markets” with 52 companies that have grown up to become unicorns, 10 of which have generated exits. Notably, 71% of the time we’ve invested in these companies prior to a $1B+ valuation.
As markets evolve and mature, they offer an environment that transformative companies can thrive in. Our early entry into high-potential markets has allowed us to have a front-row seat to local innovation, and in ten instances (and counting!), we have invested in the very first unicorn from a country. Seeing companies like Peak Games in Turkey and Kavak in Mexico reach this coveted milestone has inspired countless entrepreneurs, and injected confidence into investors.
Though more people may agree today than in 1997 that entrepreneurial ecosystems can and should be built around the world, our work at Endeavor is far from done. Regional companies like Mercado Libre out of Argentina and Nubank out of Brazil have market caps exceeding $100B and $60B, respectively, proving to investors and naysayers everywhere that not just unicorns, but also multi-billion dollar outcomes are possible from these markets.
Established companies have long recognized the value of investing in startups to access emerging technologies, innovative business models, and obtain fresh market perspectives. This trend gained significant traction following the venture boom in 2021-22, leading some companies to establish dedicated corporate venture capital (CVC) arms.
As of 2024, over 1,300 unicorns exist, with 24 of them having dedicated corporate venture capital (CVC) arms, including companies like Mercado Libre (Mercado Libre Fund), Databricks (Databricks Ventures), and Flexport (Flexport Ventures). In our own portfolio, Globant’s CVC, Globant Ventures, is actively investing in cutting-edge sectors like AI, blockchain, and future-of-work technologies. Globant Ventures has also backed several of our Endeavor companies, such as Elsa in Vietnam.
In addition to CVC arms, established companies in emerging markets — particularly in Latin America and the Middle East — are increasingly launching their own structured venture studios or funds, though not necessarily under the CVC model. These initiatives still reflect a targeted approach, where they actively seek to shape the ecosystems around key industries and regional opportunities. Notable examples include Unifonic (Saudi Arabia), which launched X, a venture studio and accelerator fund to support software startups in the MENA region; and Latitud (Brazil), which created the venture capital fund, Latitud Ventures, and a fellowship program to back early-stage startups across Latin America.
We’ve observed that even companies without formal venture arms are actively investing in other businesses, collectively making nearly 100 investments. See below for examples in our own portfolio.
Founders acting as investors closely aligns with Endeavor’s Multiplier Effect, where founders build their ecosystems by mentoring, investing in, and inspiring the next generation of entrepreneurs.
“It takes 10 years to be an overnight success,” Jeff Bezos wryly notes. This has certainly proven true in our own portfolio. Building a great company requires not only overcoming inevitable challenges, but also the resilience to endure over time. In venture capital, we’ve seen that successful exits often take a decade or more to materialize. To date, 36 companies in our portfolio have gone public or been acquired, on average ~11 years since their founding and ~4 years since our initial investment. We expect liquidity to pick up in 2025.
One positive indicator is increased demand in secondary markets, which allows funds to deliver DPI (distributed to paid-in capital, a formula that measures how much money is returned to investors) to limited partners amidst a private-for-longer environment. Since 2010, the global venture secondary market grew from $25B to $138B, fueled by increasing allocations to venture capital, private-for-longer companies, and increased investor demand for liquidity. In 2024, we participated in secondary sale opportunities including in Contabilizei’s (Brazil) $125M raise and Insider’s (Turkey) $500M Series E.
We also expect increased IPO activity, with a number of companies in our portfolio preparing to access the public markets once conditions are suitable. Improved trading performance for high-quality companies has boosted confidence, and there is significant pent up demand for these issuances. Beyond the US, exchanges in the Middle East and Asia — such as the Saudi Stock Exchange and the Singapore Exchange — are actively engaging with tech companies and attracting international investors, supported by recent regulatory reforms. In our own portfolio, Tabby (Saudi Arabia) is expected to list in Riyadh, following the successful Tadawul IPO of Nice One in January 2025. We’ve observed similar trends in Brazil and Indonesia, where local exchanges offer liquidity and are less affected by US macroeconomic conditions.
Beyond secondary sales and IPOs, M&A activity appears to be picking up against a favorable regulatory backdrop. The main drivers have been expanding product offerings within the same sector, often driven by AI and data computing technologies, and entering new markets. In 2024, dozens of M&A transactions have been led by our own portfolio companies.
Our outlook for 2025 is informed by rapid technological advancements that are transforming industries and ushering emerging markets towards maturity. Though the outlook for 2025 is largely positive, challenges still remain. Not all rounds will be up rounds. Companies that have failed to meet the higher level of investor and market scrutiny will likely shut down or fall out of the venture funding cycle. And while we expect IPOs to increase from their 2023-24 levels, we do not expect to reach the levels seen in 2021. We also don’t expect SPACs to make a comeback anytime soon.
As venture capital continues to expand its global reach, though, the future looks bright with the promise of AI, opportunities for liquidity, and a diverse range of players stepping into the investor role. More liquidity in the venture capital ecosystem is a net positive, creating a trickle down effect that spurs innovation and growth around the world. If we’ve learned anything from the last five years, it’s to ride the venture capital currents with discipline, optimism, and a long term view. Entrepreneurs will always show us the way; 2025 is poised to be a good year.
Behind the 345+ companies in our portfolio are 380+ high-impact entrepreneurs dreaming big. They are transforming lives and economies across multiple industries worldwide. Learn more below!
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