TLDR:
- Global venture capital investments fell to a near five-year low in Q1 2024.
- Investors poured $75.9 billion in the January-to-March period, their lowest since Q2 2019.
Global Venture Capital Investment Near 5-Year Low in Q1, PitchBook Data Shows
According to data from investment intelligence firm PitchBook, global venture capital investments saw a significant decline in the first three months of 2024, nearly reaching a five-year low. Despite significant investments in the AI space, high interest rates have weighed on funding for companies.
The key points highlighted in the data are as follows:
- Investors poured $75.9 billion in the January-to-March period, marking their lowest investment level since the second quarter of 2019.
- The number of estimated deals also fell to a near four-year low of 10,222 during this period.
- Tight monetary policy in the U.S. has contributed to a slow revival in initial public offerings, impacting venture capital firms’ returns.
- The value of exit deals by VC firms was at a six-year low of $234.3 billion last year, with exits for U.S.-based firms hitting their lowest since 2016.
- While VC funding saw a significant decline in 2023, funding for AI start-ups has shown resilience, with a pick-up in tech IPOs in the first quarter of 2024.
Top firms like Anthropic have raised substantial funds from backers like Amazon.com, signaling positive signs for VC funding despite the current challenges.
With expectations of interest rate cuts later in the year, industry experts anticipate a potential increase in IPO activity in the coming months, potentially alleviating the current slowdown in venture capital investments.
