SVB – State of the Markets, 2H 2024

The innovation economy in 2024 is experiencing recovery and recalibration. US venture investment, although lower than in 2021, is still higher than in most years. Companies are finding it harder to raise funds, with some being disproportionately affected like seed-stage startups and unicorns waiting for exit markets to thaw. Growth remains a challenge for many companies, with CFOs prioritizing margins over growth. The end of zero-interest-rate policy and a tougher fundraising environment have exposed companies buying growth without strong underlying businesses. Recovery is expected in the second half of the year, with anticipated cuts in interest rates and increased political clarity. The focus is on generative AI as the driving force of innovation, with investors comparing it to past seismic shifts like the industrial revolution. The long-term outlook is positive, with the belief that the innovation economy will continue to grow and drive the broader economy for years to come.