U.S. startups received significantly more venture capital funding in Q2 2024 than in the prior quarter or in Q2 2023, according to data released this morning by PitchBook and the National Venture Capital Association.

• The number of startups receiving such funding, however, was significantly lower — reflecting how a small number of giant AI deals are skewing the data.

What they're saying: "My big takeaway is that the venture market continues to be pressured and it's going to continue for a while," Nizar Tarhuni, PitchBook's VP of institutional research and editorial, tells Axios. "We're seeing VCs deploy less capital, making it harder to raise new money, and then there's less money to deploy."

• "But we're also seeing a lot of sloppy Series A deals get done for AI startups, with two-page docs and $15 million checks ... This is what happens in a hype cycle."

A few things that caught my eye:

Valuations are up but may be misleading.

• Pre-money valuations soared for growth deals, hitting a $238 million median. But a lot of that is born of existing unicorns that held off fundraising for a couple of years, only returning to market when it was necessary.
• "Over half of the companies raising at high valuations also had high valuations when they last raised in 2021 or 2022, and aren't getting big step-ups," Tarhuni explains. "The mediocre ones are raising non-priced rounds or aren't able to raise at all, so what looks like strong valuations is masking what's really happening."

Female-founded startup funding is way down, both from last year and its 2021 peak. This is true for both dollars and deal count.

• One hypothesis is that VC firms became more intentional about finding and funding such companies in the wake of Me-Too, and have since lost that focus.

Investor protections "have become prominent within term sheets."

• Kyle Stanford, PitchBook's lead VC analyst, explains that this is more about a marked increase in cumulative dividends than it is about liquidation preferences.

There's geographic consolidation throughout the lifecycle.

• Around 77% of large deal value went to companies in the four top VC hubs: SF, NYC, LA, and Boston. That's not too uncommon.
• More surprising was that those hubs also secured a slight majority of early-stage dollars, which tend to be more dispersed. This seems to be a result of the AI boom, in which the entrepreneurial ecosystems are more concentrated than in general tech or biotech.

Helsing, a German defense-tech startup focused on NATO's Eastern flank, raised €450 million in Series C funding led by insider General Catalyst at a reported €4.95 billion valuation.

Why it's the BFD: Russia's invasion of Ukraine has opened the floodgates of defense-tech investment in Europe, where U.S. startups sometimes struggle to get contracts.

• It also makes Helsing one of Europe's most valuable startups.

Other investors include Elad Gil, Accel, Saab, Lightspeed, Plural, and Greenoaks.

• Helsing is Accel's first defense-tech deal, while General Catalyst is already an investor in U.S.-based Anduril.

Check out the first edition of Axios' new Future of Defense newsletter, and video of this morning's kick-off event.

The bottom line: "Helsing makes software designed to boost weapons capabilities, such as drones and jet fighters, and improve battlefield decisions ... Alongside the financing, Helsing announced a new entity in Estonia and committed to spend €70 million on Baltic defense projects over the next three years." — Mark Bergen, Bloomberg

• Skild AI, a Pittsburgh AI robotics company, raised $300m in Series A funding at a $1.5b valuation. Lightspeed Venture Partners, Coatue, SoftBank Group and Jeff Bezos co-led and were joined by Felicis Ventures, Sequoia Capital, Menlo Ventures, General Catalyst, CRV, Amazon, SV Angel, and Carnegie Mellon University. axios.link/3Wf1OIR

🚑 Element Biosciences, a San Diego-based DNA sequencing company, raised $277m in Series D funding. Wellington Management led, and was joined by Samsung Electronics, Fidelity, Foresite Capital, T. Rowe Price, and Venrock. axios.link/3XYLkFX

🚑 Earned Wealth, a New York-based financial adviser for physicians, raised $200m. Summit Partners and Silversmith Capital Partners co-led, and were joined by insiders Juxtapose, Hudson Structured Capital Management, and Breyer Capital. axios.link/3Llmo42

🚀 X-Bow Systems, an Albuquerque maker of solid rocket motors, raised $70m in Series B funding. Razor's Edge led, and was joined by Lockheed Martin Ventures, Boeing Ventures, Crosslink Capital, and Balerion Space Ventures. axios.link/3LlQTa5

🚑 Regard, an LA-based clinical insights platform, raised $61m in Series B funding. Oak HC/FT led, and was joined by Cedars-Sinai Health Ventures, and insiders TenOneTen, Calibrate Ventures, and Techstars. axios.link/4cE0MvU

• Fireworks AI, a Redwood City, Calif., generative AI inference startup, raised $52m in Series B funding at a $552m valuation. Sequoia Capital led, and was joined by Nvidia, AMD, and MongoDB. fireworks.ai

• Armada, an edge computing startup focused on satellite connectivity, raised $40m. M12 led, and was joined by Founders Fund, Lux Capital, Felicis, Valor Equity Partners, 8VC, and Shield Capital. axios.link/4cVlV4l

• TBC Bank Uzbekistan, a mobile-only bank owned by TBC Bank Group (LSE: TBGC), raised $38.2m from its parent company, ERDB, and IFC. axios.link/3Wkwetn

🚑 Adona Medical, a Los Gatos, Calif., developer of heart failure solutions, raised $33.5m in Series C funding. Cormorant Asset Management and TCP Health Ventures co-led, and were joined by Excelestar Ventures, the PA MedTech VC Fund II, Unorthodox Ventures, and AMED Ventures. adonamed.com

• Buildots, an Israeli AI construction software company, raised $15m. Intel Capital led, and was joined by OG Tech Partners. www.buildots.com

Medal, a game-clipping product maker that's also developing a contextual AI assistant, raised $13m at a $333m valuation from Horizons Ventures, OMERS Ventures, Peak6, and Arcadia Investment Partners. https://axios.link/3Y5JV0e

• Lemon.markets, a German brokerage-as-a-service startup, raised €12m from CommerzVentures, Heliad, Creandum, Lakestar, Lightspeed, and System.one. axios.link/3S4qKjF

• Nagish, a New York communications platform for deaf and hard-of-hearing people, raised $11m in Series A funding. Canaan led, and was joined by insiders K5 Global, Tokyo Black, and Cardumen Capital. axios.link/3XZMbXc

⚡ NLine Energy, a Hood River, Ore., provider of energy efficiency and recovery solutions, raised $11m. Mirova led, and was joined by Steyn Group and Burnt Island Ventures. nlinenergy.com

• Rome, a platform bringing Solana services to Ethereum Layer-2 solutions, raised $9m from Hack VC, P2 Ventures, HashKey, Portal Ventures, Bankless Venture, Robot VC, LBank, Anagram, TRGC, and Perridon Ventures. rome.builders

• Term Labs, a DeFi lending protocol, raised $5.5m led by Electric Capital. termfinance.io

• Adfin, a British invoicing startup, raised $4.9m in seed funding co-led by Index Ventures and Visionaries Club. axios.link/4eVM6tr

• Beeble AI, a South Korean virtual production platform for indie filmmakers, raised $4.75m in seed funding at a $25m valuation. Basis Set Ventures led, and was joined by Fika Ventures. axios.link/3S2qUs0

• Lekko, an SF-based provider of "dynamic configuration" solutions for developers, raised $4.5m in seed funding. Addition and Lux Capital co-led, and were joined by SV Angel, BoxGroup, and Abstraction Capital. axios.link/4bC2KLQ

• Idle, a provider of DeFi yield automation and hedging tools, raised $2.4m. RockawayX led, and was joined by Fasanara Digital. axios.link/3RZoJFs

🌎 Kolum, a German carbon compliance startup, raised €2.1m in pre-seed funding led by FoodLabs. axios.link/4cz94EZ

• Xiaohongshu, a Chinese social media platform, raised new funding co-led by DST Global and HongShan Capital at a $17b valuation, per the FT. axios.link/3zxZR18

🚑 Access Infusion Care, a Gaylord, Mich., portfolio company of New Harbor Capital, acquired Big Sky I.V. Care, a Kalispell, Mont., provider of home and specialty infusion services. accessinfusioncare.com

🚑 Aqua Dermatology, a portfolio company of Gryphon Investors, acquired First Coast Mohs, a Jacksonville, Fla., dermatology and skin cancer specialist group. aquadermatology.com

• Bain Capital agreed to buy Envestnet (NYSE: ENV), a Berwyn, Pa., financial software maker, for $4.5b, or $63.15 per share. Also participating on the buyside are Reverence Capital, BlackRock, Fidelity, Franklin Templeton, and State Street. axios.link/463hkek

⚡ Blackstone bought a 30.2% stake in Kansas energy infrastructure firm Tallgrass Energy from Spain's Engas (Madrid: ENG) for $1.1b. axios.link/3WhpdcL

• Genstar Capital is in advanced talks to buy a stake in Austin, Texas-based payment processor AffiniPay at nearly a $3b enterprise value (including debt), per Reuters. Existing backer TA Associates would retain a stake. axios.link/4eWxzOe

• Lamons, a portfolio company of First Reserve, acquired Houston-based Auge Industrial Fasteners. lamons.com

• Platinum Equity agreed to buy Héroux-Devtek (TSX: HRX), a Canadian maker of landing gear and other aerospace products, for C$1.35b, or C$32.50 per share. axios.link/3VVPdsN

• PSG Equity invested in Benchmark Analytics, a Chicago workforce management platform for public safety agencies. axios.link/3xUZe1k

• TA Associates invested in Indian lender Vastu Housing Finance. axios.link/4cY0P5w

• TGI Sport, a Canadian portfolio company of Bruin Capital, agreed to buy Supponor, a London-based provider of live media virtual advertising, at a €100m enterprise value. axios.link/3S1YVZo

• TowerBrook Capital Partners upped its offer for British payments group Equals Group (LSE: EQLS) to £253m. /axios.link/3W13EvG

The U.K. has made major changes to its listing rules, in an effort to lure more IPOs to London.

• Shift Up, s South Korean game developer backed by Tencent and IPX, raised $320m in a Seoul IPO, and then saw shares rise 18% in their first trading day. axios.link/4eW15nc

• Apax Partners has sold its remaining 10% stake in Genius Sports (NYSE: GENI), a London-based sports data company. axios.link/4bCXZBL

🎧 Lemonada Media, a podcast network that works with Sarah Silverman and Meghan Markle, is exploring a sale, per Axios Pro. It's raised $10.5m from firms like Blue Collective, BDMI, Greycroft, and Intuition Capital.

• Alphabet (Nasdaq: GOOG) no longer is weighing a takeover bid for HubSpot (NYSE: HUBS), a Boston-based marketing software firm, per Bloomberg. axios.link/3Lk1emU

• Aurea Holding, led by Mike Jatania and former UBS banker Paul Raphael, is nearing an agreement to buy British cosmetics retailer The Body Shop out of bankruptcy, per Bloomberg. axios.link/3zO4152

• Crédit Agricole (Paris: ACA) is in advanced talks to buy German consumer-finance firm Hanseatic Bank from Société Générale (Paris: GLE), per Bloomberg. axios.link/3LiLmRG

⚡ Eversource Energy (NYSE: ES) sold its 50% stake in the 924 MW Sunrise Wind offshore wind project in New York to Denmark's Ørsted, grossing $230m. eversource.com

• Zodia Markets, the crypto subsidiary of Standard Chartered, is in talks to acquire Elwood Capital Management, an OTC trading and settlement provider, per Bloomberg. axios.link/3zM0oMY

• Alliance Consumer Growth raised $160m for its fifth fund. acgpartners.com

🚀 Alpine Space Ventures of Germany raised €170m for its debut fund. axios.link/4cAMJXJ

• Booom raised €17m for its debut fund, which will back angel-through-seed rounds for European B2B software startups. It's led by Felix Plapperer, a former partner with SquareOne. axios.link/45Yyycq

• Kearny Jackson, an early-stage VC firm, raised $65m for its third fund. axios.link/4cUhXJf

• RCP Advisors of Chicago is raising up to $800m for its fifth PE co-investment fund, with $116m already committed, per an SEC filing.

• Shield Capital, a national security-focused VC firm, has secured $116m for a $350m-targeted second fund, per an SEC filing.

• Brad Fischtrom joined Altamont Capital Partners as an operating partner focused on P&C insurance investments. He previously was COO of Ledger Investing. axios.link/3xV5B4L

🚑 Andrew Hewlett joined Bailey & Co. as a managing director of health care investment banking. He previously was with B. Riley Financial. axios.link/3WkvJQ1

• Carlos Pinto, previously with RBC and Morgan Stanley, joined XMS Capital Partners as a London-based managing director focused on fintech and financial services. axios.link/3VXj18h

Vista Outdoor's saga had a surprise twist yesterday when Institutional Shareholder Services reversed its support for the company's planned sale of its ammo business to Czech arms company Czechoslovak Group.

• This could be a boost for the Dallas family office MNC Capital, whose $42 per share, all-cash bid for the entire company was rejected.
• In a statement, Vista argued that ISS "relies heavily on inaccurate claims made by MNC."
• A shareholder vote is scheduled for July 23 on the ammo unit sale to Czechoslovak Group, which recently received CFIUS approval.