Today: Jul 22, 2024

Tech startup funding crashes to lowest point in 4 years

7 months ago


  • Startups saw a decrease in venture investments in 2023, with the value of funding hitting a four-year low.
  • Investors focused on artificial intelligence (AI) firms, while other tech companies struggled.

According to a report from Bloomberg News, venture capitalists invested $170.6 billion in the U.S. in 2023 across 15,000 deals, representing a 30% drop from the previous year.

Global venture funding for startups also declined, with investors worldwide pumping $345.7 billion into startups, a 35% decrease from 2022 and the lowest level since 2017.

The report highlights that there are now around 54,000 U.S. companies with venture backing, which venture capital analysts argue is “too many.”

Fundraising for venture capitalists also dropped, down two-thirds year over year in the U.S. and nearly half worldwide. American venture funds raised $66.9 billion in 2023, while globally funds took in $160.9 billion.

As a result of the funding decline, startups are laying off workers and closing their doors. Approximately 3,200 venture-backed firms in the U.S. went out of business in 2023, having raised a total of $27.2 billion.

This decrease in funding aligns with the increasing number of bankruptcies seen in the FinTech sector. The lack of VC funding and struggling public markets have left many FinTech companies in a precarious position.

Overall, the funding decline in 2023 has been a challenging year for startups, with the value of venture investments hitting a four-year low and resulting in layoffs and closures. The focus on AI firms and an oversaturation of venture-backed companies have contributed to this decline.