When Headcount Counts
How Investors are Pricing Scale and Story

While headlines fixate on AI replacing workforces, investors are betting big on the people building and using it. Venture capital and corporate buyers are backing late-stage AI firms at steep premiums. This research introduces a new framework for decomposing deal value into three components: industry enthusiasm, workforce scale and firm-specific differentiation. By tracking how these drivers have evolved over time, the analysis reveals shifting investor priorities, growing premiums for thematic exposure and early signals of momentum embedded in deal value outliers.

Key Findings:

• AI is (unsurprisingly) in vogue: In 2024, AI companies pulled in nearly $95 billion, an 89% year-over-year increase, as investors chased exposure to a maturing sector. The industry premium, reflecting baseline valuations for AI firms regardless of size, has more than doubled since 2019. The trend shows no signs of slowing: in the first half of 2025 alone, nearly $70 billion has been deployed, with valuation baselines climbing further.
• Venture capital triples down on late-stage “AI-powered” opportunities: Capital is concentrating in AI-powered applications such as software, analytics and mobility, which now represent nearly 70% of all AI-related deal flow.
• Team size still matters, but less than before: Historically, larger teams were closely tied to larger checks. That link has weakened, as investors place more weight on sector momentum and company-specific factors beyond team size.
• Premium deal size points to future rounds: AI firms priced above expectations — based on headcount and industry — were more likely to raise capital again within 12 months and grew headcount four times faster than peers.

Explore the data used to conduct this research:

Headcount Analytics

Get an extensive view of a company's workforce composition, trends and metrics with detailed insights into 220+ million employees worldwide and monthly updates since 2010 covering more than 4.5 million entities, users can evaluate the potential of investment opportunities with unparalleled accuracy. 

Rounds of Funding

Access private placement data for public and private companies. This datasset provides detailed information for each stage of funding. The dataset is sourced from our existing Market Intelligence and S&P Capital IQ databases and is supplemented with Transactions data from Crunchbase. The details provided on the structure of each funding round helps users understand how investor preferences change as a target company has grown with relevant characteristics of a company’s growth and fundraising ability.

Company Intelligence

A robust offering of qualitative data including a time series of company auditors, competitors' information, alternate and foreign language company names, key documents and filings, alternate address information, and Topic Tags. Currently, 291 topic tags are available on the S&P Capital IQ Pro platform, relating to more than 1.1 million private and public companies. Topic tags allow users to surface relevant companies in trending, niche sectors to derive company insights.