TLDR:
- Global VC funding declined in 2023, but there were positive signs in generative AI and cleantech.
- Generative AI saw a significant increase in VC funding, while cleantech startups raised 2.5 times more funding in the second half of 2020.
A new report by Startup Genome and the Global Entrepreneurship Network analyzed the state of startups in 2024. The report revealed a decline in global VC funding in 2023, with Series A funding dropping by 46%. However, generative AI and cleantech sectors showed promise amidst the downturn. Generative AI accounted for 20% of all VC funding in 2023, triple the amount in 2022. Cleantech startups also performed well, raising 2.5 times more funding in the second half of 2020 compared to the first half. European cleantech startups outperformed the U.S. and China in Series A funding growth over the last two years.
The report also highlighted the top global startup ecosystems, with Silicon Valley, New York City, and London leading the rankings. Tokyo entered the top 10 for the first time, and other regions like Madrid and Barcelona ranked high in the emerging-ecosystems list. Despite the challenges, the report emphasized the resilience of early-stage startups, particularly in AI and cleantech, which are positioned for growth.
Overall, the report suggests that global startup ecosystems are on the verge of a new growth cycle. Despite the funding downturn, opportunities exist for those who invest during or after such periods. The report encourages entrepreneurs to capitalize on unique opportunities that arise in times of transition, signaling potential growth in the near future.
