Pitchbook Q3 2024 Takeaways

Q3 2024 Venture Report: Navigating the Trifecta of Opportunity

By Saxon Baum, Partner at Florida Funders

The venture landscape in Q3 2024 tells a compelling story. While market headwinds persist, we’re witnessing a surge in strategic deals, successful exits, and a pipeline bursting with potential. Leveraging our vantage point in the rapidly growing tech ecosystem of the Southeast, Florida Funders is seizing the opportunities at hand and capitalizing on technological revolutions like AI.

Here’s our review of the latest market data and trends with a summary of Q3 across the broader VC landscape and Florida Funders’ unique perspective.

Liquidity and Exit Activity: Signs of Movement

While Q3’s IPO and M&A markets remained cautious – logging 14 IPOs and $10.4B in total exit value, still far from pre-COVID levels – strategic moves are gaining momentum. The quarter closed on a promising note with Cerebras, the new $4.25B AI chip-maker, filing to go public. This unicorn could be the first major tech listing since Rubrik’s April debut, marking a shift in market sentiment and hopefully signaling a thaw in the exit market.

Our portfolio reflected this evolving dynamic with encouraging M&A activity. Florida Funders capitalized on a secondary offering to sell 50% of our position in Rewst, securing a significant return for our fund. This transaction speaks to the growing importance of secondary offerings in today’s market, where traditional liquidity options are limited. Meanwhile, DraftKings’ acquisition of Simplebet demonstrates the reemergence of strategic M&A, albeit cautiously.

Deal Flow and Fund Deployment: Supporting Growth While Staying Agile

Insider rounds and bridge financings have kept deal counts high as companies navigate this investor-advantaged climate. Yet, a broader shift is evident: GPs have tapped the brakes, cautiously deploying just 23.1% of dry powder to deals over the past year while returns remain constrained.

Florida Funders has maintained our strategic approach, supporting our Fund 1 and Fund 2 portfolios through targeted follow-on investments, with $5M of follow-on capital available in FF Fund 2. Meanwhile, we’re making moves in Fund 3, completing two compelling opportunities this quarter: Autonoma and OpenHome.

New Fund 3 Investments: Autonoma and Open Home

We like to stay ahead of the curve but prefer not to place all our bets on individual companies within uncharted verticals. Autonoma is an excellent example of this strategy: rather than betting on one autonomous vehicle company, we invested in a picks-and-shovels infrastructure play—technology that all players in the space can leverage.

Similarly, OpenHome taps into the growing trend of voice-based AI and natural language processing (NLP). As consumers shift away from screens, Open Home’s SDK platform enables developers to create various voice-powered solutions, making it a versatile tool with broad applications. These investments embody our philosophy: focus on the tools and infrastructure driving technological revolutions, not just the end products.

Portfolio Highlights: Exits, New Rounds, and Progress Across the Board

Several of our portfolio companies made significant progress this quarter:

  • Betr completed an up-round, reinforcing its growth trajectory.
  • Manifest secured a strategic investment from a16z, solidifying its position in the market.
  • Flex is actively working on an acquisition and a new investment round.
  • Repscrubs continues to deliver steady growth.
  • XGen AI has installed a new leadership team and is working on a new funding round we’re excited to support.

These developments reflect our commitment to supporting our companies with both capital and strategic guidance, ensuring they break through barriers to growth.

Strategic Partnerships: Dragonfly Operating Partners Helping Companies Break Through

Our partnership with Dragonfly Operating Partners continues to deliver exceptional value. Their hands-on approach with our middle-tier portfolio companies—those with strong potential who need extra support to overcome challenges and scale—has proven transformative. This formula has worked well with companies like Satisfi Labs, where Dragonfly’s operational expertise has already accelerated growth. This partnership also opens unique doors for our investors, enabling them to engage more deeply with portfolio companies beyond traditional capital deployment.

Regional Insights: Southeast Ecosystem and Miami's Continued Growth

The Southeast is still steadily growing as a tech hub, with AI leading deal flow across the region in line with national trends. Miami had another solid quarter of investment and innovation, completing 73 deals and deploying $700 million—an increase from 69 deals and $670 million in Q2.

For more insights on the broader trends in the Southeast, you can check out the BIP Ventures State of Startups 2024 report here.

Looking Ahead: A Strong Finish to 2024 and a Bullish Outlook for 2025

We could not be more excited about what lies ahead following this quarter’s momentum. Our recent exits and upcoming distributions signal tangible value for our investors while Fund 3 advances toward its March 2025 close as we navigate fundraising challenges.

Florida Funders is taking full advantage of the convergence of three powerful market forces, the trifecta:

  1. The most investor-friendly market in the past 20 years
  2. A thriving tech ecosystem in Florida and the Southeast
  3. A technological revolution driven by AI and other groundbreaking technologies

We’re bullish about the future, and our playbook for the quarters ahead is clear: deepen our support for portfolio companies through strategic follow-ons, amplify deal flow through initiatives like our outbound strategy led by Chelsea Oppenheim, and convert recent exits into meaningful investor returns.

While the market recalibrates, our conviction has never been stronger. The foundation we’ve built—through carefully chosen investments, strategic partnerships, and operational excellence— positions Florida Funders to capture outsized opportunities for our investors in this evolving venture landscape.

Want to get involved? Learn about the opportunities to invest with Florida Funders.

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