TLDR:
- Global venture capital funding increased by 11% in Q1 2024, driven by large gen AI deals.
- The fintech sector saw a setback in Q1 2024, with a decline in funding and deal count.
According to new data released by business analytics platform CB Insights, venture capital (VC) funding increased by 11% in Q1 2024. This growth was primarily driven by massive deals in generative artificial intelligence (gen AI), with major tech players like Amazon and Alibaba investing billions in gen AI startups. The ongoing enthusiasm for gen AI among investors reflects its potential as a catalyst for innovation and efficiency enhancements.
In 2023, gen AI startups received a record-breaking US$21.8 billion across 426 deals, with notable investments in companies like OpenAI, Inflection AI, and Databricks. While global VC funding rose slightly in Q1 2024 to reach US$58.4 billion, it marked a 21% decline compared to Q1 2023. Mega-rounds over US$100 million increased by 30% in Q1 2024, with corporate investors driving some of the largest deals.
On the other hand, the fintech sector experienced a setback in Q1 2024, with a decline in funding and deal count. Fintech startups raised a total of US$7.3 billion through 904 VC rounds, down 16% from the previous quarter. The sector also saw a decrease in new unicorn companies, with only six new unicorns in Q1 2024. Europe was the only region to see an increase in fintech funding, growing by 22% QoQ.
Overall, the global fintech funding landscape has been facing challenges due to economic uncertainties, inflation, and a looming global recession. Global fintech funding dropped by 50% in 2023 compared to the record high in 2021. Despite these challenges, the interest in gen AI investments continues to drive growth in the venture capital space.
