Investor wallets were tight in the startup sector during the first quarter of 2024. While exceptions included startups in artificial intelligence, healthcare, energy, and robotics that attracted significant investments, overall investor sentiment was cautious as the year began.

According to Crunchbase data, global investments in startups in the first three months of 2024 totaled around $60 billion, the second-lowest figure since 2018. Although total investments improved compared to the fourth quarter of 2023, this was only because that quarter was the worst in the last six years.

Funding was sluggish in North America, the world's largest startup investment market, accounting for about half of all venture capital. Investments in American and Canadian companies reached $35.2 billion in the first quarter of 2024. However, investors made significant investments in specific artificial intelligence and healthcare startups, driving these sectors to the top of the investment charts.

Despite the overall decline in funding, early-stage startup investments increased. Funding in this stage totaled about $29.5 billion, a 6% year-over-year increase, driven by substantial Series B funding in artificial intelligence, electric vehicles, and green energy. Seed-stage investments also performed better than late-stage investments.

Despite a slight rise in global funding, VC investments in Asian startups declined in the first quarter. Total startup funding in the region fell to $17.3 billion, a 4% drop from the fourth quarter of 2023 and an 8% decline year-over-year. This is the lowest amount recorded in Asia since the fourth quarter of 2016.

However, Chinese startup investments rose during the same period. Chinese startups raised $1.1 billion in the first quarter, a 9% increase from the previous quarter and a 14% increase from the first quarter of 2023. China remains by far the largest startup market in Asia, with most investments from Chinese investors due to ongoing US-China tensions.

Latin America's startup funding slipped to its lowest level in recent years, with both investment amounts and transaction numbers declining. Investors funneled only $579 million into growth-stage rounds in the first quarter of 2024, down 17% year-over-year and 39% from the previous quarter. At its peak in 2021, Latin American startup funding exceeded $7 billion in a single quarter.

Nonetheless, one Latin American country bucked the downward trend. Investments in Colombian startups more than tripled compared to the previous quarter, reaching $188 million.

In Europe, startup funding remained relatively stable. Investments in European companies reached $11.8 billion in the first quarter of 2024, slightly up from the fourth quarter of 2023 and down less than 10% from the first quarter of 2023. Approximately 18% of global VC funds in the first quarter went to European startups. The leading sectors in Europe in terms of funding were financial services, healthcare, and energy, with artificial intelligence companies raising about $1.4 billion, accounting for 12% of total funds.

Cybersecurity proved resilient in the face of global funding downturns. According to Crunchbase, investors spent $2.7 billion across 154 deals to support cybersecurity startups in the first quarter, marking the best quarter for the sector in the last three quarters.

In contrast, Web3, which includes blockchain, crypto, and other decentralized internet technologies, experienced a decline in funding after an earlier surge. Startups in the Web3 space raised less than $1.9 billion across 346 deals in the first quarter of 2024, significantly down from the nearly $10 billion invested in the first quarter of 2022.