The Mixed State Of Startup Funding In 2024, In 11 Charts

Startup investors kept a tight hold on their wallets in the first quarter of 2024, Crunchbase data shows. There were big exceptions — some AI, healthcare, energy and robotics startups, among others, received massive investments — but overall the tone was cautious as the year got started.

To break it down further, let’s look at 11 charts based on recent Crunchbase data that show the state of the startup world in early 2024.

Startup investors globally remain cautious

First-quarter startup investment globally had its second-worst quarter since 2018, Crunchbase data shows. Although investment totals improved since Q4 2023, that’s only because that quarter was the worst in six years.

Funding was similarly subdued in North America, the largest startup investment market in the world with about half of all venture capital going to the region.

Still, investors made big investments in some AI and healthcare startups, pushing those two sectors to lead in global investment totals in Q1.

Early-stage funding actually grew

Investment in early-stage startups globally in the first-quarter actually grew, despite the overall funding dip, Crunchbase data shows.

Funding at this stage totaled around $29.5 billion, up 6% year over year, led by large Series B fundings in AI, electric vehicles and green energy.

And seed and angel investment also held up better than late stage, offering hope that as the recovery continues there will be a robust class of funded younger companies ready to grow.

A16z emerges as the leader in new funding environment

In late 2023, venture capitalist Marc Andreesseen penned “The Techno-Optimist Manifesto,” a long, impassioned and somewhat rambling defense of the tech sector.

Based on investment activity, anyway, his firm does seem to be quite bullish on the current moment: Andreessen Horowitz (a16z) participated in 27 post-seed funding rounds in the first quarter of 2024 — more than any other venture investor — Crunchbase data shows.

Runners-up for the title of most-active investor in Q1 include the accelerator Y Combinator, which backed 18 known post-seed deals (in addition to many more seed rounds) and General Catalyst, with 15 rounds.

Notably, A16z was also the most active startup investor in 2023.

Cybersecurity: not recession proof, but resilient

Cybersecurity is sometimes described as virtually recession-proof. After all, hackers don’t take a break just because the economy is struggling.

While that’s not exactly true — investment in cyber startups in 2023 was just a third of what it was in the VC boom of 2021 — funding to the sector has proven resilient relative to other industries.

Venture investors spent $2.7 billion in 154 deals backing cybersecurity startups in Q1, Crunchbase data shows, marking the industry’s best funding quarter in three quarters.

Investors who spoke with Crunchbase News said there is still lots of interest in the sector, especially around new technologies like AI.

“The widespread adoption of generative AI technologies, coupled with recent geopolitical conflicts like the Russia-Ukraine and Israel-Gaza wars, has escalated the frequency and sophistication of cyber attacks,” Gili Raanan, founder and partner at Cyberstarts, said in an earlier interview.

Asia funding stays tepid despite China’s gains

Despite the small uptick in global venture investment, venture funding to Asia-based startups again fell in Q1.

Total venture funding in the region fell to $17.3 billion in Q1, a drop of 4% from Q4 2023 and an 8% decline year to year. The total represents the lowest amount of funding in the Asia region in a single quarter since Q4 2016.

But investment in Chinese startups actually increased in Q1, helped by several huge rounds. Chinese startups raised $1.1 billion in Q1, up 9% from the previous quarter and 14% from Q1 2023, Crunchbase data shows. The country remains the Asia region’s largest startup market by far.

As U.S.-Sino relations remain testy, investment in Chinese startups in recent years has been led by the Asian nation’s own investors, rather than American VC firms.

Large rounds to China-based companies in Q1 went to: electric vehicle maker Zhiji Automobile, which raised a $1.1 billion Series B; artificial intelligence startup Moonshot AI, which raised more than $1 billion in a funding round led by Alibaba Group and HongShan (formerly Sequoia Capital China); and low-orbit broadband satellite network company Yuanxin Satellite, which raised a $943 million Series A led by China Development Bank.

LatAm funding scene struggles — with a big exception

Funding to Latin American startups also hit the lowest level in years last quarter. Both dollar investment across stages and deal counts declined.

Overall, investors put just $579 million into seed- through growth-stage rounds in Latin America in the first quarter of 2024, according to Crunchbase data. That’s a decline of 17% from year-ago levels and a drop of 39% from the prior quarter.

The past quarter was a particularly precipitous comedown from the region’s funding peak nearly three years ago. At the high point, investors poured over $7 billion into Latin American companies in a single quarter in 2021.

One Latin American country bucked the trend, however. Investment in Colombian startups more than tripled from the prior quarter to hit $188 million, largely due to big rounds for Bogotá-based fintechs Simetrik and Bold.

Europe holds (mostly) steady

Over in Europe, meanwhile, startup funding didn’t markedly increase — but it didn’t fall significantly, either.

Venture investment in the continent reached $11.8 billion in the first quarter of 2024, up marginally from Q4 2023 and down less than 10% from Q1 2023, per Crunchbase data.

Overall, around 18% of global venture capital in Q1 was allocated to European startups.

Leading sectors for funding in Europe were financial services, healthcare and energy. AI companies raised $1.4 billion, or around 12% of European venture capital. That was about $1 billion less than was raised by financial services companies.

Web3 funding bounces back a little from epic lows

Perhaps no sector exemplifies the recent venture funding boom and subsequent slump like Web3.

The sector — which loosely includes blockchain, crypto and other decentralized internet technologies — was a tech-sector darling in 2021 and 2022, with investors handing out massive funding rounds and eye-watering valuations on a weekly basis.

But startups related to Web3 raised less than $1.9 billion in 346 deals in Q1, per Crunchbase data — a fraction of the roughly $10 billion invested in the first quarter of 2022.

Still, because Web3 funding has fallen so far, the most recent quarter actually represents an increase from Q4 2023, when startups in the sector raised just $1.2 billion in 263 deals. It also marks the first quarterly increase Web3 venture funding has seen since Q4 2021.

– Gené Teare, Chris Metinko and Joanna Glasner contributed.