Beyond AI, venture market remains stodgy midway through 2024

PitchBook revisited its annual VC outlook and said the year will be slower than 2023. Unless you’re among a handful of high-flying AI companies, the startup-funding market remains a difficult place. PitchBook’s analysts took stock of where some of their already-subdued expectations for 2024 stand halfway through the year in a new report. They found that “sticky” inflation, which led the Federal Reserve to pause interest rate drops, put a damper on exits and fundraising, along with high interest rates and geopolitical tensions. With $20.4 billion in open funds tracked so far this year and some “lags in data collection,” PitchBook now forecasts a total venture capital haul for 2024 of $79.3 billion—with a downside estimate of $58.8 billion and an upside of $92.1 billion. That middle stat would put 2024 slightly below last year’s total of $84.7 billion, and at less than half of the stratospheric highs of 2021 and 2022 ($175 billion and $191 billion, respectively). “Expectations for the turnaround in the VC market entering 2024 were not especially high,” analysts wrote in the report. “Through the first six months of 2024, inflation continued to be sticky, interest rates remained at the high level they ended 2023 with, and geopolitical events kept a haze on the horizon.”