TLDR:
- Venture capital dollars flowing to Greater San Diego technology companies are becoming less frequent in 2024
- However, there are still sizable rounds of funding happening in the region
San Diego’s tech industry has seen a decline in VC funding in 2024, with only 43 deals in the first half of the year compared to 60 deals in the same period last year. Despite this, the two largest tech deals this year include Platform Science raising $125 million and Firestorm Labs raising $12.5 million. The IPO market has also struggled, leading to a resurgence in new investments in portfolio companies by VC funds and a return to the market by PE shops in M&A activity.
As the year progresses, early-stage startups are finding it harder to raise funds due to economic uncertainty and high interest rates. However, sectors like AI, biotech, health-tech, and fintech are weathering the downturn better. There is optimism in the industry, with some believing that San Diego’s tech ecosystem is slowly recovering. Local entrepreneurs are still finding opportunities for investment, and there is an uptick in seed activity in recent months.
Despite the challenges, there is a silver lining with growth in aerospace startups and potential rebound for SD’s tech ecosystem. Local investors are hopeful for a bounce back, although one major challenge remains the lack of late-stage financiers in the region. The market is also seeing more reasonable valuations and investor-friendly deal terms. Overall, there is a sense of excitement back in the startup ecosystem as tech financing deals pick up momentum.
