Investment recap for June 2024

In June 2024, the global startup ecosystem exhibited a dynamic and evolving landscape, marked by significant developments, strategic investments, and notable shifts in ecosystem rankings.

This report provides a comprehensive overview of the key investment activities and trends that defined the month, with a detailed focus on the Global Startup Ecosystem Report 2024 (GSER), significant funding activities, and the drivers behind the rise of Tokyo as a prominent player in the global startup scene.

Overview of global startup ecosystem report 2024

The Global Startup Ecosystem Report 2024 (GSER), released during London Tech Week, offers an in-depth analysis of over 4.5 million startups spread across more than 300 global ecosystems. The report serves as a barometer for the health of the global startup ecosystem, highlighting key trends, challenges, and opportunities that are shaping the future of startups worldwide.

key highlights from the report

1. Top Ecosystems: Silicon Valley continues to lead as the world’s most influential startup ecosystem, followed closely by New York City and London, which are now tied for second place. Notably, Tokyo and Seoul have made significant gains, entering the top 10 at 10th and 9th places, respectively. Miami has also shown strong performance, climbing to 16th place, reflecting a broader trend of rising ecosystems outside traditional hubs.
2. Funding Trends: The GSER report indicates a substantial decline in Series A funding, with a 46% drop in 2023 compared to the previous year. Additionally, large exit values saw a 47% decline, underscoring the challenging environment for later-stage startups. However, early-stage investments showed signs of recovery, with Q1 2024 experiencing increased funding and deal counts compared to Q4 2023.
3. Focus on Generative AI: Generative AI emerged as a major focus area in the startup ecosystem, accounting for nearly 20% of all VC funding in 2023. This sector witnessed a 3x increase in funding compared to 2022, driven by the rapid adoption of technologies like ChatGPT and the growing interest in AI-driven innovations.
4. Cleantech Resilience: Cleantech startups demonstrated resilience amid broader market challenges, with late-stage startups raising 2.5 times more funding in the second half of 2023 than in the first half of 2020. European ecosystems, in particular, have led the way in cleantech investments, with significant growth in Series A funding for cleantech ventures.

Funding activities in june 2024

The funding landscape in June 2024 was marked by a significant uptick in investment activity, with startup funding reaching approximately $1.71 billion. This figure represents a 148% increase from the previous month, indicating a renewed interest in innovative sectors despite the overarching challenges in the global funding environment. Several key sectors and regions contributed to this growth, reflecting the evolving priorities of investors.

analysis of key sectors driving funding growth

1. Generative AI: As highlighted in the GSER 2024, generative AI has become a focal point for investors, with startups in this space attracting substantial funding. The increasing application of AI across various industries, from content creation to healthcare, has driven a surge in investment, with June 2024 seeing multiple high-profile funding rounds for AI-driven startups.
2. Cleantech: Cleantech continued to attract significant investment, particularly in Europe, where ecosystems have shown strong growth in this sector. Late-stage cleantech startups raised substantial funding, reflecting the sector’s resilience and the growing importance of sustainability in the global economy.
3. Healthtech: Healthtech startups also saw increased funding, driven by the ongoing demand for innovative solutions in healthcare. The COVID-19 pandemic has accelerated the adoption of digital health technologies, and this momentum has continued into 2024, with investors showing strong interest in healthtech innovations.
4. Fintech: Fintech remained a key area of focus, particularly in emerging markets where financial inclusion and digital payment solutions are driving growth. Startups offering innovative financial products and services, especially those leveraging blockchain technology, attracted significant investment in June 2024.

Notable regional developments and ecosystem rankings

The GSER 2024 report also shed light on significant regional developments, with several ecosystems showing notable improvements in their rankings. The rise of Tokyo as a top 10 global startup ecosystem is particularly noteworthy, reflecting the city’s growing importance in the global startup landscape.

tokyo’s rise in the global startup ecosystem

Tokyo’s ascent to the 10th position in the global startup ecosystem rankings marks a significant achievement, driven by a combination of government initiatives, strong economic potential, increased foreign investment, and a focus on emerging technologies. Several key factors contributed to Tokyo’s rise:

1. Government Initiatives and Investment: The Tokyo Metropolitan Government has played a crucial role in promoting the city as a startup-friendly environment. A substantial investment of ¥10 trillion has been allocated to foster innovation and attract startups. These efforts have positioned Tokyo as a leading hub for entrepreneurship and innovation in Asia, emulating the success of other major cities in the region.
2. Strong Economic and Market Potential: Tokyo’s vast metropolitan economy, with a gross metropolitan product comparable to that of entire countries, offers startups access to a large and sophisticated consumer base. The city’s robust economic infrastructure and market potential make it an attractive destination for startups looking to scale their operations.
3. Increased Foreign Investment: The depreciation of the yen has made Tokyo a more attractive destination for foreign investment, particularly in real estate and startups. The influx of overseas funds, coupled with relatively affordable real estate prices, has created a favorable investment climate, contributing to the city’s rise in global rankings.
4. Cultural and Economic Resilience: Tokyo’s resilience in the face of economic challenges has further enhanced its appeal as a business hub. The city ranks highly in global city rankings for factors such as public safety, hospitality, and efficient transportation systems, all of which contribute to its attractiveness for startups and investors alike.
5. Focus on Emerging Technologies: Tokyo’s emphasis on research and development, particularly in the fields of generative AI and other emerging technologies, has positioned the city as a leader in tech-driven innovation. This focus aligns with global trends, as investors increasingly seek opportunities in cutting-edge technologies.
6. Improved Infrastructure and Connectivity: Tokyo’s extensive and reliable transportation network, combined with ongoing urban development projects, has improved connectivity within the city. This infrastructure is essential for startups that rely on efficient logistics and access to talent, further strengthening Tokyo’s position in the global startup ecosystem.

other emerging ecosystems

In addition to Tokyo, several other ecosystems showed notable improvements in their rankings, reflecting the dynamic nature of the global startup landscape.

1. Seoul: Seoul’s rise to the 9th position in the global rankings highlights its growing influence in the startup ecosystem. The city’s strategic investments in technology and innovation, coupled with a strong talent pool, have positioned it as a key player in the global startup scene.
2. Miami: Miami’s advancement to 16th place underscores the increasing importance of non-traditional startup hubs. The city’s growing tech scene, coupled with its appeal as a business-friendly environment, has attracted significant investment and talent, contributing to its rise in the rankings.
3. Madrid: Madrid emerged as the top emerging ecosystem, climbing an impressive 12 places in the rankings. The city’s strategic focus on innovation and entrepreneurship, supported by a strong infrastructure and access to talent, has made it a leading destination for startups in Europe.
4. Greater Lausanne Region: The Greater Lausanne Region’s rise to 11th place among emerging ecosystems reflects its growing importance as a hub for innovation and technology in Europe. The region’s strong academic institutions and focus on research and development have attracted significant investment, driving its ascent in the rankings.
5. Barcelona: Barcelona’s continued rise in the rankings, now at 2nd place among emerging ecosystems, highlights its growing influence in the global startup landscape. The city’s vibrant tech scene, coupled with a strong focus on innovation and entrepreneurship, has made it a leading destination for startups in Southern Europe.
6. Jakarta: Jakarta’s entry into the top 10 emerging ecosystems, ranking 6th, reflects the growing importance of Southeast Asia as a hub for innovation and entrepreneurship. The city’s strategic location, coupled with a large and dynamic market, has attracted significant investment, driving its rise in the global startup ecosystem.
7. Metro Rhein-Ruhr: The Metro Rhein-Ruhr region’s entry into the top 10 emerging ecosystems, now at 9th place, underscores the growing importance of regional innovation hubs in Europe. The region’s strong industrial base, combined with a focus on technology and innovation, has positioned it as a leading destination for startups in Germany.

conclusions and future outlook

The Global Startup Ecosystem Report 2024 and the investment activities in June 2024 provide valuable insights into the evolving dynamics of the global startup ecosystem. While traditional funding routes have faced challenges, particularly in later-stage investments, emerging sectors like generative AI and cleantech have shown resilience and growth. The significant funding activity in June 2024, with $1.71 billion in startup investments, reflects a renewed optimism in the startup ecosystem, driven by innovative sectors and strategic regional developments.

Tokyo’s rise to the 10th position in the global startup rankings is particularly noteworthy, as it reflects the city’s growing importance in the global startup landscape. The combination of government initiatives, strong economic potential, increased foreign investment, and a focus on emerging technologies has positioned Tokyo as a leading hub for innovation and entrepreneurship.

Looking ahead, the global startup ecosystem is expected to continue evolving, with emerging technologies, sustainability, and regional innovation hubs playing a critical role in shaping

the future of startups worldwide. As investors seek opportunities in cutting-edge technologies and resilient sectors, the startup ecosystem is poised for continued growth and transformation in the coming months and years.