VC Funding for Tech Startups in 2023: What’s Next?
Did you catch our midyear look at the VC investment landscape for tech startups? While funding has slowed, we saw that InsurTech and FinTech startups still had plenty of opportunities to attract investors, especially with savvy budgeting and marketing plans.
So, we know where we are, but where are we going? What investment trends can we expect to see emerging in the latter half of the year?
AI Startups to Win Big
AI has had quite a year, particularly in the realm of content generation. Thanks to generative AI, art, blogs, social media, and chatbots have evolved in multiple ways.
In June, Salesforce Ventures doubled their Generative AI Fund, an investment pot for AI startups, to $500 million. Their goal is to “bolster” the startup ecosystem while encouraging the development of responsible AI. Expect more funding to pour into AI as generative tools move from content marketing into sales, collaboration, and productivity. Savvy investors who see the success of beneficiaries of funds like this will no doubt see the potential for big returns.
Climate Tech to Transform Investment Environment
The Inflation Reduction Act provides several benefits and incentives to businesses that contribute to slowing or fighting climate change. This means climate tech startups have big opportunities to get noticed—indeed, in 2022, climate tech companies received record levels of investment.
2023 didn’t look so hot at first, with some startups losing funding due to the collapse of SVB (Silicon Valley Bank). However, TechCrunch suggests that climate tech providers are well-placed to receive high levels of VC investment for the remainder of 2023. Investors are looking for new and exciting ventures such as low-carbon agricultural or food tech and apps that support a circular economy.
Investors Are Cautious, but Tech Funding Is Rising
The banking crisis in the early part of the year, combined with rising costs and interest rates, means investors are naturally cautious. However, the overall average value of companies in the IT sector has risen by 39% during 2023. This could prompt venture capitalists to take more risks with tech startups they see as particularly innovative or who have a solid strategy for growth and marketing.
Crunchbase suggests that as well as generative AI, hot tech industries to seek investment in could include recruitment tech, esports, and tech related to the energy sector. FinTech and InsurTech also continue to attract investment when innovation meets good business sense.
Final Word
Attract investors and promote sustainable growth by assessing your existing marketing strategy. Arch Collective can audit your current marketing efforts and give you workable insights to help you get your app or platform the attention it deserves. Book a 15-minute introductory call to find out more.
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