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Venture

Global Venture Funding In Q1 2024 Shows Startup Investors Remain Cautious

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The first quarter of 2024 was the second-lowest on record for global startup funding since the beginning of 2018, according to an analysis of data.

Global venture funding reached $66 billion in the first quarter, up 6% quarter over quarter but down 20% year over year, SA国际传媒 data shows.

The lowest in the past six years was the previous quarter, Q4 2023. While funding amounts for the most recent quarter will increase a bit over time as data is added and reviewed, the overall investor outlook remains cautious.

Table of Contents

Healthcare and AI lead

AI continued to stand out as a leading sector for investment in the first quarter. Companies in the AI sector raised $11.4 billion in Q1, or around 17% of global funding, SA国际传媒 data shows. The largest rounds went to:

  • Beijing-based , a large language model company that raised $1 billion led by ;
  • Humanoid robot company , based in Sunnyvale, California, raised $675 million and partnered with ; and
  • Shanghai-based , creator of AI companions and avatars, raised $600 million in another round led by Alibaba.

Still, AI was not the largest sector last quarter. The industry that raised the most amount of funding was healthcare and biotech. Companies in that sector raised $15.7 billion, or 24% of all global funding, in Q1.

Seed

Seed companies raised just over $7 billion, down by more than $1 billion year over year.

However, seed funding 鈥 which has been the most robust stage through the downturn 鈥斅爄s still above 2020 global quarterly amounts. That reflects the fact that during a tightened funding environment, many venture investors looked to invest earlier in the cycle while many founders held off from raising a Series A round as the bar for subsequent investment was raised.

Seed funding counts fell in Q1 2024. (Keep in mind, however, there is typically a pronounced time lag for seed fundings that are added retrospectively to the SA国际传媒 dataset.)

Early stage grew

Early-stage funding increased in Q1. Funding at this stage totaled around $29.5 billion, up 6% year over year, and was led by large Series B fundings in AI, electric vehicles and green energy, SA国际传媒 data shows.

Late-stage pullback

Late-stage companies raised $29.5 billion, down 36% year over year, marking the biggest pullback by stage in Q1. In a slower funding market, late-stage funding typically fluctuates quarter over quarter.

IPO markets pop

It is too early to say whether the IPO markets will make a true comeback in 2024. However, two venture-backed companies went public within a day of one another in the latter half of March and both traded up significantly on their first day.

  • Shares of 6-year-old , a Santa Clara, California-based semiconductor company, gained 72% in their first day.
  • Shares of 18-year-old San Francisco-based social news site increased 48% by end-of-day trading.
  • Astera Labs has nearly doubled from its IPO price, while Reddit, still above its IPO price, has lost some of that first day gain.

Other signs of recovery

It鈥檚 not just the IPO market that looked stronger at the end of the first quarter. is said to be raising , and leading startup accelerator is raising . Both are signs that venture capital remains an attractive asset class for leading investors.

But despite the positive signals from AI, recent public market activity, and the fundraising environment, many investors are still dealing with the liquidity shortfall from 2022. As investors focus on liquidity, founders will continue to face a challenging funding environment.

Methodology

The data contained in this report comes directly from SA国际传媒, and is based on reported data. Data reported is as of April 3, 2024, and will be updated again before the final report is published.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

Please note that all funding values are given in U.S. dollars unless otherwise noted. SA国际传媒 converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to SA国际传媒 long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

We have made a change to how we include corporate funding rounds in our reporting as of January 2023. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.

Seed and angel consists of seed, pre-seed and angel rounds. SA国际传媒 also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. SA国际传媒 includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the 鈥淪eries [Letter]鈥 naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million.

Technology growth is a private-equity round raised by a company that has previously raised a 鈥渧enture鈥 round. (So basically, any round from the previously defined stages.)

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