The article also highlights that AI startups saw an increase in funding, raising close to $50 billion in 2023. However, investors predict a cooling off in 2024 due to legal implications. M&A dealmaking for venture-backed startups also dropped in 2023, hitting a 10-year low in the U.S. Investors suggest that buyers are waiting for valuations to drop further before making acquisitions.
Key takeaways:
- Last year saw the lowest level of startup funding in five years, with Q4's $58 billion in total venture spending being the lowest quarterly amount in a year that itself had the slowest level of venture investment since 2018.
- Cybersecurity funding has also been hit by the venture downturn, with just $8.2 billion invested into startups in the space globally last year, a five-year low.
- Seed funding has remained fairly robust, with U.S. seed investment actually growing 10% in 2022, despite a global drop in startup funding.
- Investment in Web3 and metaverse-related startups has drastically decreased, while startups that incorporate AI into their businesses raised close to $50 billion in 2023, making it the largest sector to show an increase.