5 top tech and startup trends we’re seeing in 2024, from AI to IPOs

Between the rapid rise of AI and the often dramatic decline of startups large and small, 2023 was an action-packed year for technology and risk.

In many ways, we expect 2024 to be the year where things calm down a bit. The buzz around artificial intelligence will likely decrease, but hopefully, so will the layoffs. The IPO markets may bounce back slightly, and we expect that after nearly two years of funding declines, venture capital will level off.

Here’s a look at the five trends Crunchbase News editors and reporters are seeing in the new year.

The AI ​​buzz goes away

Perhaps the most interesting thing to watch in 2024 will be what happens with AI, and specifically AI investment.

While rounds of more than $100 million have been the norm this year, many investors are at least talking about a potential pullback in the market as valuations continue to rise and many question how profitable the generative AI market will be.

Of course, OpenAIs and Anthropics will likely continue to be able to get pretty much any valuations they want, but FOMO seems to be wearing off for investors in the space, and many believe other industry changes could affect investor sentiment.

Even as 2023 rolls around, many investors seem less and less interested in marketing or sales platforms that simply wrap AI around their platform.

Some venture capitalists expect the legal and regulatory dilemmas facing AI companies both in the US and abroad to slow the flow of funding for AI startups in 2023.

Others point to the fact that when the mobile revolution happened more than a decade ago, the biggest winners when it came to the underlying infrastructure layer ended up being established tech companies. Sure, there were startup winners — like Twilio — but many big tech companies benefited the most from the latest wave.

Of course, these big tech firms are already playing a big role in AI, investing billions of dollars in various AI startups. Companies like Nvidia, Salesforce 1, Microsoft and Google are extremely active and this could continue to drive AI funding in the new year.

It’s important to remember that AI is expensive. Startups need data, computing power, talent, and a variety of other resources—all of which big tech companies can provide.

If they stall and VCs pull their money, 2024 could turn cold for many hot AI startups.

— Chris Metinko

Slowdown of venture funds

While many expect to see a rise in startups closing due to changes in the funding landscape (see Convoy), what about the venture capital firms themselves?

News of OpenView seemed to rock the venture world when it broke in December, and its uncertain future is likely to be watched by many.

However, VCs are expecting similar headlines in 2024.

The salad days of 2020 and 2021 spawned many new firms, many of which are seeing their investments on paper after a large number of startups had to cut their valuations. These firms will be unable to raise new funds, forcing some to close up shop and possibly even sell their current stakes in the companies early.

Even some large, established firms have had to alter fundraising plans to accommodate the emerging market this year, as both San Francisco-based Founders Fund and New York-based Tiger Global announced cuts to their new funds .

Expect more of this. Venture capital seems like a fun business when money is cheap, but when recalibration happens, the risks become apparent.

— Chris Metinko

Cuts in the tech sector have slowed, but they’re not over

With at least 300,000 tech workers in the US alone having lost their jobs since we started tracking tech layoffs in early 2022, we’d like to be able to say that we expect job cuts to end in 2024 d. But with startups continuing to close at the end of 2023 and major companies even cutting ahead of the holidays, it doesn’t look like the layoffs are ending just yet.

Yes, thankfully we haven’t seen the scale of layoffs we saw in November 2022 and January 2023—when major tech companies including Amazon, Alphabet, Microsoft, Meta, and Salesforce cut jobs by the tens of thousands—but a quick look to The Crunchbase Tech Layoffs Tracker (and our LinkedIn feeds) makes it clear that there is still a lot of pain in the tech workforce. While some of the layoffs are strategic layoffs, others are mass layoffs across the board.

Couple this with the still-unfavorable outlook for the IPO market in 2024 and difficult fundraising for startups, and we expect layoffs to continue to pile up for at least the foreseeable future.

— Marlies van Romburgh

End of story “it’s all downhill”.

As we discussed, 2023 was a year of negative results. Investments in startups in almost every sector, stage and geography are down significantly from 2022 and even further below the peak in 2021.

In 2024, however, it will be much easier to craft a positive funding narrative during the year. In sectors like, say, consumer goods e-commerce, where investment has fallen in recent quarters, it won’t take much to herald a sharp upturn.

We’re also hopeful that overall investment in startups will pick up in 2024. With tech stocks rallying in recent weeks, buoyed by hopes of a rate cut by the Federal Reserve, we’re likely to finally see a return to some IPO- so.

– Joanna Glassner

Don’t expect an IPO boom, though

We may see some IPOs return next year, but don’t expect the IPO market to roar back.

That’s the updated outlook we’re hearing from those who watch the markets closely, especially given the tepid performance of the 2023 listings of Klaviyo and Instacart, the only two major venture-backed IPOs since late 2021.

In the current environment, public market investors are pickier about which companies they want to see IPO, insiders told us. Namely, they are more interested in profitability than growth at any cost, and often look for larger, more established companies that can maintain a stable market capitalization.

This means that companies that can delay an IPO can do so until 2025 or later.

Then again, there are nearly 1,500 private companies with valuations of $1 billion or more currently on the Crunchbase Unicorn board — and all of them have to go public or otherwise exit at some point.

— Jean Teare

Illustration: Dom Guzman

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