TLDR:
Key Points:
- Deal making dropped to a 7-year low in Q1’24
- Funding saw an 11% QoQ climb, driven by generative AI
In the first quarter of 2024, analysts are examining the venture capital landscape. CB Insights’ State of Venture Q1’24 report reveals a mixed bag for VC dealmaking. While dealmaking hit a 7-year low in Q1, there was an 11% QoQ increase in funding driven by generative AI. Large deals and AI were key factors in this increase. Although the total funding for the quarter reached $58.4B, it is still down 21% from the previous year and 62% from Q1’22.
The global number of deals decreased by 7% in Q1, with Asia and Europe experiencing declines of 8% and 9%, respectively. However, the US saw a slight increase of 1% in deals QoQ. Mega rounds, deals worth $100M+, grew by 30% QoQ, with 105 transactions for the quarter. Additionally, there were slightly fewer new unicorns in Q1 compared to the previous quarter.
While funding for fintech decreased by 16% QoQ, digital health and retail tech sectors saw gains. Silicon Valley continued to dominate US funding with $14.4B in Q1, receiving $4 out of every $10 in funding. Despite the challenges in the venture capital landscape, there are some positive indicators and areas that analysts are monitoring closely as they enter Q2 in 2024.
