Predictions for VC and Startup Landscape in 2024

In anticipation of 2024, many venture capitalists (VCs) and startups are optimistic despite the challenges faced in 2023, marked by uncertainty, rising interest rates, and sluggish growth. While funding figures have decreased compared to the highs of 2021 and 2022, there's still a positive outlook for the coming year. Here are key predictions for 2024:

1. Wash Out of Legacy Growth Deals:

• Recovery in VC and startup funding is anticipated in 2025.

• Slow growth and global instability will persist in 2024, impacting valuations and investor confidence.

• Approximately 2,000 US growth-stage businesses are expected to reprice, affecting the global venture sector.

• Bitcoin is a bright spot, poised for another bull run in 2024, with the potential for the first Bitcoin ETF approval.

2. AI Hype Gives Way to Viable Use Cases:

• The AI hype, particularly around generative AI and large language models, may see a reality check in 2024.

• Specific AI use cases, particularly in healthcare, finance, manufacturing, and addressing environmental challenges, will emerge.

• Challenges around data access, compliance, and ethical use will be central in the AI landscape.

3. Smart, Data-Driven Manufacturing:

• The manufacturing sector is undergoing a quiet revolution with low-maintenance, IoT-driven solutions.

• Companies are leveraging IoT, computer vision, and AI to increase efficiency and reduce waste.

• VC interest in manufacturing technology is growing, recording a 46% increase in funding in the 12 months to September 2023.

4. Solving Hard Problems with Hardtech:

• VC interest in hardtech, addressing physical world challenges, is on the rise.

• Funds like HCVC in Europe are focusing on breakthrough technologies in areas like ultra-precise sensors and next-generation semiconductors.

5. Data Developments in Digital Health:

• Federated data platforms will rise in adoption, enabling shared patient datasets for collaborative research and personalized medicine.

• Improved data systems and harmonization will lead to superior multi-modal AI models in healthcare.

• Challenges persist in balancing tech implementation, cost savings, and data privacy regulations.

6. B2B and Cross-Border Payments:

• Innovation in B2B and cross-border payments will continue, addressing issues of speed, cost, and efficiency.

• Startups exploring blockchain, digital wallets, and stablecoins will drive advancements in payment systems.

• Integration of AI is expected to enhance payments insights, efficiency, customer service, and fraud prevention.

7. Rise of the Frugal Entrepreneur:

• The economic challenges of 2023 have led to a shift in successful entrepreneurship.

• Frugal entrepreneurs prioritize sustainable growth, innovation at a low cost, and a path to profitability over excessive funding rounds.

• Meticulous spending and innovation with limited resources will be crucial for success in the evolving entrepreneurial landscape.

As 2024 unfolds, these predictions highlight the resilience and adaptability of the VC and startup ecosystem in the face of ongoing challenges and emerging opportunities