NXTGEN

Q1 24 GLOBAL VC TRENDS

A Summary of critical data emerging from the Q1 24 global VC data

Investors globally are looking for tangible signs that the slump in Venture Capital (VC) is showing signs of easing. Increased investment into startups, improving valuations and a pick-up in the number and value of IPOs would all be early signs of a recovery. Unfortunately, looking at PitchBook data and the KPMG Venture Pulse Q1 24 Report alongside Crunchbase Insights, investors will have to wait a little longer for these positive signs, as VC deal value and volume have dropped again.

Highlights From Around The World

The significant things holding VC back include geo-political conflict and fears of war leading to a generally more conservative capital allocation approach from LPs, interest rates remaining higher for longer, and a weak IPO market clogging up liquidity. Some of the key highlights we see in the Q1 report include:

• Down rounds have stabilised since 2023, at around 15% globally.
• Corporate entities continue to pull back on investing in VC globally.
• Global exits are the lowest since before 2018. The IPO market is being viewed as the best proxy for improving VC trends.
• Europe bucked the global trend with a healthy uptick in VC investing in Q1 24 (19% quarter-on-quarter growth and 21% year-on-year growth). The proportion of down rounds improved despite exits still being problematic.
• China remains on a steady downward trend, with -23% growth quarter-on-quarter and -29% growth year-on-year. This might be a sign of the impact of broader economic challenges.

When having a look at Crunchbase Insights data, we see:

•  Early-stage investing increased 6% year-on-year in Q1 24 (25% quarter-on-quarter). This is an encouraging sign for future investing activity, but VCs still need the IPO market to open up to release funds in the more mature startups.
• LatAm funding in Q4 23 seemed to be a frontrunner for the global recovery, but it crashed down to earth again in Q1 24.