The venture capital (VC) landscape in 2024 is predicted to undergo transformations, presenting new opportunities, trends, and challenges for startups, fund managers, and tech sectors. The following key points summarise the predictions for the coming year.
- The VC fundraising dynamics are projected to shift towards smaller funds, after initially favouring larger funds for stability.
- Startup funding is expected to gain momentum throughout the year, with an anticipated peak towards the year end. However, there will be a rise in startups shutting down due to inadequate funding.
- Despite a careful beginning, IPOs are anticipated to gradually increase with many expected to be down rounds attributing to strong fundamentals but higher private valuations.
- AI startups led by former FANG and big tech engineering teams are expected to thrive and attract substantial funding.
- A frenzy of M&A activity is expected as startups reassess strategies, which may lead to market consolidation as larger companies seize acquisition opportunities.
- Enterprise adoption of AI is expected to increase moderately in 2024.
- Emerging sectors, such as autonomous/EV cars, alternative protein, and climate tech are expected to face challenges underlined by regulatory landscapes, consumer acceptance and technology hurdles.
- Defense technology is anticipated to witness growth, however, a potential stall in space tech development.
- Twitter is predicted to recap its debt, while a notable private tech startup is anticipated to face failure.
- An unexpected acquisition of a major private startup for an amount below its last funding round is expected.
- B+ Series to IPOed founders are likely to leave and return to their startup roots.
Despite the turbulence, strategic foresight and adaptability will be fundamental in navigating the evolving dynamics of fundraising, startup survival, IPO trends, and sector-specific challenges in 2024.
