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The 2024 Global Startup Ecosystem Report (GSER) by Startup Genome and the Global Entrepreneurship Network launched at London Tech Week, collaborating with the Founders Forum, Informa Tech, and London & Partners.
Now in its 12th year, the GSER provides insights into the world’s leading startup ecosystems, emerging trends, and key challenges facing entrepreneurs. The 2024 edition provides guidance on how public and private leaders can foster thriving startup communities — the #1 engine of job creation and economic growth.
It also offers a valuable perspective on the global startup landscape and actionable recommendations for entrepreneurs, investors, policymakers, and other stakeholders looking to drive innovation and economic growth even in these challenging times.
Startup Genome is the world-leading innovation ecosystem development organization, having worked with more than 160 economic and innovation ministries and public/private agencies in over 55 countries.
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Speaking on why they publish these reports, JF Gauthier, Founder and CEO of Startup Genome, says, “Governments worldwide recognize that their long-term investments in startup ecosystems will only pay off if their homegrown startups succeed globally. This necessitates global mentorship and commercialization support from governments and startup communities. The report provides a compass to navigate the characteristics and strategies that enable startups to scale globally.”
One key aspect of this year’s report was the notable decline in global VC funding, “Series A funding amount in 2023 was down 46% from 2022, and the value of large exits ($50M+) fell 47% over the same period.”
GSER says, “In a strong global startup economy, large exits ($50 million+) free up financial and human capital that can support newer ventures. Conversely, in a tighter exit environment, capital and talent remain locked in for longer instead of moving on to their next venture. The exit slowdown, therefore, diminishes ecosystem growth potential as early-stage startups struggle to secure adequate funding and late-stage startups languish, having to decide if they should try to secure another round in the current down funding climate or exit early at a lower valuation.”
Generative Artificial Intelligence Leads Startup Funding
Furthermore, Generative AI saw a surge in funding, with nearly 20% of all VC funding in 2023 going to GenAI-focused startups. GenAI VC funding increased 3x in 2023 compared to 2022.
The 2024 GSER data certainly supports this narrative: in 2023, 18% of all VC funding went to GenAI-focused startups. Even as global funding was down, GenAI had its best funding year to date by far. GenAI VC funding increased 3x in 2023 compared to 2022, and deal counts nearly doubled.
While this surge in AI funding was the result of several factors, the release of ChatGPT 3.5 for the general public on November 30, 2022, served as a launch point for the year to come as investors and enthusiasts alike turned their attention to this cutting-edge technology.
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Silicon Valley holds 59% of Total Ecosystem Value Within the Top Five Global Ecosystems
In addition, Silicon Valley accounts for 59% of the total Ecosystem Value within the Top 5 global ecosystems. North America remains the globally-leading region in terms of the number of tech startup ecosystems in the ranking (18 of the Top 40). The top five global ecosystems remain unchanged from 2020, with Silicon Valley at #1 and New York City and London tied at #2.
Last year, GSER 2023, Los Angeles was #4, followed by Tel Aviv at #5 – however, this year, they are tied at #4. These top five account for a collective $4.4 trillion in Ecosystem Value, 54% of the total of the Top 40 ecosystems.
The remaining 35 ecosystems are collectively worth $4 trillion in Ecosystem Value. Silicon Valley accounts for 59% of the total Ecosystem Value within the Top 5 global ecosystems – up 3% since last year.
Silicon Valley’s late-stage funding (Series B+) is a significant factor in its success. Global late-stage funding amount decreased 39% in 2023 compared to 2022, but only 6% in Silicon Valley. As a result, in 2023, Silicon Valley increased its global share of late-stage funding to 26%, even as its deal count share has decreased.
Learn more about global key findings from The 2024 Global Startup Ecosystem Report.
