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2023 was a wild ride.?
The year when startups tightened their spending
The year when AI went mainstream
The year full of tumult, tech layoffs, and startup failures.
That’s been a lot to process.
The year 2024 is expected to go easier on emerging companies, yet the funding topsy-turvy carries on.?
Let’s have a quick look at the analysis and predictions below.
It may not look as promising and heady as we’d all hope, but it’s the first time in a handful of years that we're finally seeing the light at the end of the tunnel:
It’s the ultimate end of the ‘old normal’ and the beginning of the new operational reality.
Let’s turn to our crystal ball and dig into the near-future predictions of what 2024 has in store for different sectors.
AI- and LLM-fication, value-based care
In 2023, we saw healthcare technology picking up pace in the areas ranging from pharmaceuticals to AI-assisted care. The year 2024 will be marked by new advancements and dilemmas that result from the maturation of these early innovations.
????More sophisticated use of AI. As healthcare organizations grow into AI-based care, the coming year promises to introduce new technological and regulatory guardrails. Generative AI will begin to disrupt care coordination. Open-source, as well as small, specialized AI models, will continue to gain popularity in the healthcare sector.
???? Value-based care. On the road to value-based care, healthcare leaders will seek out next-gen therapeutics, advanced diagnostics, and novel payment models to support clinical staff challenged with new workflows and administrative requirements. Specialty care management, AI-driven risk adjustment, care plan automation at the point of care, and other innovations will pave the way for VBC.
??Medicine 3.0. In 2024, there will be a greater focus on prevention and longevity, indicating a general drift towards data-driven, personalized healthcare
?? Pharmatech. The 2023 valuations demonstrate that the biotech industry is poised for recovery in 2024. In particular, AI-enabled biotech startups are predicted to get high valuations in their early stages.
?? Surgical robotics. Medtech VC funding for surgical robotics is expected to remain at a high level over the next year, which would translate to over $500 million of venture funding in 2024.
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Fintech investment will remain muted, but it’s okay
In 2023, fintech funding fell to $43 billion, its lowest level in six years. Experts predict that in 2024, the fintech funding doom and gloom might finally be over, and the numbers will look more like they were before the pandemic in 2019.
?? Banking-as-a-service (BaaS). The demand for BaaS tech is still unsatisfied, but the regulatory load slows the growth of this category. We can expect more BaaS acquisitions by bigger banks (two-thirds of banks expect their IT spending to increase in 2024).
?? Digital payments and fintech infrastructure
?? Customer and employee experience underpinned by AI. From ChatGPT-based apps to risk management and CX tools, AI adoption in the fintech sector will stay pronounced in 2024. On the same note, AI-fuelled fintech innovations will catch more of the attention of regulators.
P.S. AI startups may get a dose of reality in 2024
Artificial intelligence and automation have solidified their place as a cornerstone of the startup ecosystem. Healthcare, fintech, climate tech, and other startups have got a technology moat because of AI. No wonder, in 2023, generative and AI-related startups received a staggering $50 billion in funding,?
But...there’s always a ‘but’ with artificial intelligence.
As AI companies face legal and regulatory dilemmas in the US and abroad, some VCs expect 2023's flood of AI funding to slow.
Also, unless you’re a heavyweight like Meta Platforms and OpenAI, you’ll need something better than a wrapper-app around ChatGPT that does everything for everyone.?
It’s the era of contextualized models — and startups should be ready for that.
Brace yourself for the pivotal year of 2024
Predicting the future is a thankless task, especially when it comes to the funding landscape. For all we know, the fundraising environment may be heavily influenced by the direction of the broader economy, which may render all the predictions irrelevant.?
However, from what we see now, health tech startups are set to take off in 2024, fintech will likely be in its consolidation phase, and climate tech startups will continue their rapid evolution in 2024. According to public opinion, we won’t see significant shifts in funding, but the coming year still holds an element of surprise.
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