🤚Dealmaking continued to slide in Q1’24.

Equity deal volume slipped for an eighth straight quarter to 6,238, putting it in line with levels not seen since 2016/2017.

⤵️Globally, the US accounted for 39% of deals in the quarter — up 3 percentage points from Q4’23 — while Asia (31%) and Europe (24%) each lost 1 percentage point.

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🔗Global venture funding grew 11% QoQ in Q1’24, bouncing back from a recent low to reach $58.4B.

Despite the rebound, this figure marks a 21% decrease year-over-year and puts quarterly venture funding roughly where it was in 2017.

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🤚The LLM Hype Shifts To A Focus On Practical Apps

Expect the fervor around large language models (LLMs) will likely only last short term. However, LLMs are a significant impetus behind practical implementations, such as those focused on green tech and sustainability.

🔓The possibilities of LLMs for green strategies abound—from optimizing energy uses to streamlining transportation systems to curb carbon emissions.

❗️For example, LLMs can analyze building data and recommend energy-efficient upgrades, or an advanced app can highlight options to optimize traffic flow in a particular district.

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🤚Focus On AI And Blockchain Remains Strong

The global AI market is growing steadily and is anticipated to achieve a compound annual growth rate of over 37% from 2023 to 2030. In turn, I expect VC investors to gravitate toward AI and blockchain startups. Here are the tendencies I've observed:

🔓First, in such a volatile period, VCs are seeking startups that not only showcase ambitious AI technology but can demonstrate clear revenue potential and focus on developing practical applications.

❗️At the same time, blockchain technology is gaining traction as a hotbed for investors, as well.

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💳Beyond VC Funding, M&A Is An Option

Investors are becoming more cautious when it comes to startups that have income projections in the far-distant future. Instead, they generally lean toward a few portfolio companies that reliably drive income, and also often choose to finance startups that work in stable niches and show predictable growth paths.

🔉It might not be enough for business owners to rely solely on traditional methods to catch VCs' attention.

📌They should consider alternative strategies, such as mergers and acquisitions, to boost financial resilience and set their ventures up for long-term success.

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📍VCs Emphasize Better Governance For Investments

During the abundant years of the past, too much capital chased too few promising investments. This imbalance often allowed founders to negotiate from a position of power, resulting in relatively weak oversight of their operations by investors.

⤵️This year, VCs are more selective and wish to have more governance over their funding. This approach aims to foster a startup's sustainable growth and mitigate investment risks.

💳In particular, VCs might actively take up board seats in startups and demand founders to put rigid policies and procedures in place. They will likely give more attention to due diligence before investing and will focus on transparent communication with founders.

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✅Global Monthly Funding To AI Companies

Overall, AI companies captured a larger share of startup investment in February, Crunchbase data shows. More than a fifth of all venture funding in February went to AI companies, with $4.7 billion invested in the sector.

🤚That was up significantly from the $2.2 billion invested in AI companies in January 2024 and the $2.1 billion invested in February 2023.

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👌AI optimism but also concern rise with sky-high valuations

The pandemic-led zero interest-rate policy funding climate is clearly in our rearview mirror. Global average monthly funding — which shot up in 2021 — has come down by 62% from that market peak.

©Still, there are many concerns in venture capital circles that AI is the next bubble, as companies in this sector continue to raise massive rounds in quick succession and at huge valuations.

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📌Stablecoin Giant Tether Invests $200M In Brain-Computer Interface Startup Blackrock Neurotech

Stablecoin issuer Tether invested $200 million in Blackrock Neurotech to take a majority stake in the brain-to-computer interface startup.

⤵️The Salt Lake City-based company creates brain-to-computer interfaces and implants that allow people to control computers and neuroprosthetics. The company had only raised $10 million before the new round from Tether, according to Crunchbase, and values Blackrock Neurotech at about $350 million, per Reuters.

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🤚New Startups Might Expect More Cash

Last year, investors allocated a lot of resources to help their current portfolio startups keep afloat in the challenging economic environment. This year, we noticed that they are likely to be more devoted to emerging startups and new ventures.

🔓Investors stay positive about the transformative potential of AI and are willing to consider new investments in this field. Sixty-one percent of institutional investors believe AI's opportunity is greater than its risk. AI has the capacity to revolutionize various industries and drive economic growth, which makes AI-focused startups golden geese.

❗️But non-AI companies also have investment opportunities. Such sectors as business and financial services, IT overall and healthcare also rank high in investors' portfolios and will likely continue to attract significant investments.

👕Source

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🔉Global Funding By Stage Through February 2024

The largest funding round in February went to 32-year-old North Carolina-based Epic Games. That was a $1.5 billion strategic investment in the Fortnite maker from Disney at a valuation of $22.5 billion, which was 30% lower than the $32 billion valuation set in a 2022 funding round for Epic.

👌The next largest funding went to a much younger company: Beijing-based AI startup Moonshot AI, which is just a year old. The large language foundation model company raised a $1 billion Series B funding at a $2.5 billion valuation led by strategic investor Alibaba and Sequoia Capital China.

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🚀Venture capital pours $2.4B into crypto startups in early 2024

🔵After three consecutive quarters of decline, crypto and blockchain startups have witnessed a significant uptick in venture capital investment.

🔵According to data compiled by Galaxy Research, investors injected $2.49 billion across 603 deals in the first quarter of 2024, representing a 29% increase in funding and a 68% rise in deal count from the previous quarter. A sustained recovery must be confirmed by subsequent quarters of growth, the report states, adding:

📌“This was the first rise in both capital invested and deal count in 3 quarters, perhaps signaling that Q4 2023 was the “bottom,” although a continuation of QoQ increases – and a more meaningful increase – would confirm that over the coming quarters.”

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⭐️Top Venture Capital Firms pt.2

🔵Techstars

➡️Techstars is a global accelerator and early-stage investor since 2006.

Details of the VC firm:

🎥Country: Israel, USA, India, China
🎥Industries: Advertising, Aerospace & Space, Agriculture, AI & ML, Biotech, Crypto & Blockchain, Climate & Sustainability, Cybersecurity, SaaS, Big Data & Analytics, Developer Tools, E-Commerce, Education, Energy, Enterprise, Entertainment, Fintech, Sports, Food & Beverage, Future of Work etc.
🎥Stages: Pre-Seed, Seed
🎥Number of investments: 4116
🎥Funds raised: $108,000,000
🎥3 remarkable investments: Rootine, Packworks, Payymnt

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⭐️Top Venture Capital Firms pt.1

🔵Y Combinator

➡️Y Combinator is a leading accelerator and venture capital providing mentorship and funding to companies across all sectors.

Details of the VC firm:

⬇️Country: USA
⬇️Industries: Enterprise, SaaS, Big Data & Analytics, Productivity, DTC, Cybersecurity, Supply Chain & Logistics, Education, Consumer, Food & Beverage, Gaming, Future of Work, Technology, Manufacturing, Infrastructure, Legal, Marketing, Agriculture, Automative, Energy etc.
⬇️Stages: Seed, Early Stage, Pre-Seed, Series A
⬇️3 remarkable investments: Coinbase, Twitch, Reddit

👕Source

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⭐️Top Venture Capital Firms pt.3

🔵500 Startups

➡️500 Global is a globally renowned venture capital firm investing in early-stage tech companies.

Details of the VC firm:

🔵Country: USA, India, United Kingdom, Brazil, France, Hong Kong, Singapore, United Arab Emirates etc.
🔵Founders: Christine Tsai, Dave Mcclure
🔵Industries: SaaS, Media, E-Commerce, Consumer, Healthcare, Proptech & Real Estate, Hardware & Industrials, Education, Devops, Fintech, Crypto & Blockchain
🔵Funds raised: $67,000,000,000
🔵3 remarkable investments: Canva, Solana, Reddit

👕Source

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