Despite the challenging funding climate, some startups managed to raise significant up rounds, including fintechs Bilt Rewards and DailyPay, sports entertainment company Minute Media, and AI chip startup Rebellions. However, tech sector layoffs continued into January, with at least 17,000 U.S. tech workers losing their jobs. Investors predict a subdued funding environment for the year, but this could change if the IPO market rebounds significantly.
Key takeaways:
- Venture funding is expected to remain constrained in 2024 unless the IPO market experiences a significant surge. Global startup funding in January reached close to $22 billion, slightly below the monthly average for 2023.
- Despite a challenging funding climate, some startups, including fintechs Bilt Rewards and DailyPay, sports entertainment company Minute Media, and AI chip startup Rebellions, managed to raise significant up rounds.
- Tech sector layoffs continued into January, with public companies including Microsoft, Salesforce 1, PayPal and Unity, as well as private unicorn companies Brex, Flexport and Discord, making further cuts. At least 17,000 U.S. tech workers lost their jobs last month.
- Investors expect startup funding to remain subdued this year, but this could change if the IPO market makes a big comeback. If that happens, investors may be willing to underwrite more risk due to the potential for upside.