As the world’s day zero investor with offices in 27 cities across six continents, Antler received almost 120,000 applications for our residencies in 2023 and spent 200,000-plus hours with founding teams before making our first investments.
All of that quality time with founders gives us a unique vantage point to identify emerging sectors, business models, problems in need of solving, and the headwinds and tailwinds faced by founders across regions.
Drawing from their in-depth experience, Antler partners around the world share their predictions for 2024, including sectors, founder opportunities and challenges, the macro environment, and other noteworthy trends developing in their markets.
Dive into our expectations for 2024 by region below.
Jump to a region:
Australia | Brazil | Canada | Europe | India | Japan | Korea | Southeast Asia | United States
AUSTRALIA
JAMES MCCLURE, Partner (Canberra)
"[There will be] positive pressure on this vintage of founders to develop repeatable growth channels to unlock further funding."
Most exciting sectors for 2024 and why:
I’m most excited about infrastructure—a traditionally unsexy business. High interest rates will mean the costs of any construction or manufacturing project will increase. This means the need for operational efficiency and supply chain innovation as a differentiator and margin generator is huge. This will lead to greater adoption of software, hardware, and altered models of production.
Will 2024 see the start of the recovery, or will the downturn continue?
2024 will be a great vintage of initial investments but the downturn in harvesting returns and availability of capital will continue.
Expanding on the availability of capital, one trend we will continue to see is the departure of well-known VC names from the landscape, either through M&A or through deciding to not raise another fund. We’ve already seen Stride.vc decline to raise another fund and OpenView Partners look to wind up. Given the challenging fundraising landscape, some funds will decide that they don’t have the desire or market differentiation or specific alpha to continue on a new 10-year path.
Challenges and/or opportunities founders will face in Australia in 2024:
Reduced valuations at Series B and beyond has meant that earlier-stage investors have placed a premium on revenue metrics and growth. This cycle will continue and this creates positive pressure on this vintage of founders to develop repeatable growth channels to unlock further funding.
Though the pure blitzscale mentality of previous years is certainly behind us for 2024, we are still seeing aggressive moves from teams. We advise startups on having a view of how these operate at scale and close monitoring of payback periods.
Other trends we'll see in VC within Australia:
We saw hundreds of AI-based ideas in 2023. This means at the early stage, investors are going to challenge founders hard on why they will be THE founding team to build a $1B+ business in this saturated space. It means VCs are increasingly black-and-white in their funding decisions: if the pitching company is not in the top decile of founder pairings that could tackle this problem, they are highly unlikely to be successful even at the pre-seed stage.
Top ambitions for the Antler team in Australia this year:
We are excited about extending our reach beyond Sydney and Melbourne much more in 2024 to help more of Australia’s best founders build their businesses with Antler.
BRAZIL
MARCELO CIAMPOLINI, Partner (São Paulo)
"Adaptation and resilience will be more important than ever for founders who want to build something from the ground up or raise new rounds for their businesses."
Most exciting sectors for 2024 and why:
Deep techs are likely to be greatly favored by the impact of AI. OpenAI (ChatGPT), Google (Bard and Gemini), and Meta (Llama 2) have already demonstrated their capabilities by launching their language models. This movement from Big Tech will create the technological foundation of a new generation of solutions. For startup founders, this is the best opportunity to address real-world problems through the creation and development of AI-powered tools.
Martechs will be in the spotlight through 2024 due to the end of third-party cookies. This will have a deep impact on all advertisers. In digital marketing, brands and corporations have a serious dependence on these trackers to understand consumer behavior and create targeted ads. Some startups have already begun to think about how to navigate the market with this huge shift. However, we believe this is just the beginning.
Fintechs also will be protagonists in 2024, at least in Brazil. Over the last five years, the Brazilian Banking and Finance sector witnessed great innovations with the launch of Pix (Brazil’s disruptive instant payment and money transfer network) and the rollout of Open Banking, an initiative that allows customers to share their financial data from one bank to another. Next year, Brazil’s Central Bank is set to launch DREX, a digital Brazilian currency that will reduce the costs of financial transactions. We believe this landscape will promote the creation of a new generation of fintechs that focus on solving problems regarding financial education and financial inclusion.
Energytechs will benefit from an extremely favorable environment in Brazil in 2024. Several legislative projects are regulating the energy transition and encouraging the adoption of cleaner energy sources. Increased demand for sustainable solutions, coupled with a reduction in technology infrastructure costs for renewable energy generation, will create a significant opportunity for founders looking to innovate in this market.
Edtechs should gain a new boost with the development of new AI tools and increased digitization in education. This is the ideal moment for startup founders to develop new tools and pedagogical solutions, focusing on creating immersive learning experiences, improving student engagement, and providing personalized guidance.
Challenges and/or opportunities founders will face in Brazil in 2024:
With the start of the “venture capital winter” in 2022, it is clear that the situation became harder for founding teams, particularly regarding fundraising. Raising new rounds became an extensive and difficult task for startups, while venture capital firms demanded more validation and financial management.
To raise any round, founding teams needed to show that they could cut costs, prioritize efficiency, and drive profitability from their business model. Investors required a shift of focus from the established marketing and customer acquisition approach to a more rational and sustainable growth strategy.
Companies that managed to make these financial adjustments survived. If they wanted to raise another round, they would need to show that they had the operation under control and that they were being efficient, delivering more with fewer resources. On the other hand, startups born during this period are already with this new mindset of efficiency, of doing more with less.
We expect to see this strict scenario for founders repeating in 2024. Venture capital firms will continue to follow the philosophy of investing in startups with good unit economics, stronger financial management, and a mindset of efficiency. Therefore, adaptation and resilience will be more important than ever for founders who want to build something from the ground up or raise new rounds for their businesses.
Will 2024 see the start of the recovery, or will the downturn continue?
In 2022 and 2023, we saw one of the toughest scenarios for the venture capital industry over the last decade with the increase in interest rates and inflation due to economic challenges brought by the COVID-19 pandemic and the outbreak of two wars. This instability scenario was a true risk inhibitor for investors, especially for those dealing with illiquid assets, such as VC. The behavior of the industry changed completely. Investments were made only to startups that showed great efficiency capabilities—making the most growth and profitability out of fewer resources.
What we saw in 2023 was a continuation of this market correction because the macroeconomic scenario didn’t show any signs of relief, mainly in the first half of the year. Startups continued to struggle to raise capital, except those without AI ideas, and funds became more discerning in analyzing businesses and signing checks.
2023 was a very difficult year in general. Startups that raised large rounds were an exception and not the rule. For 2024, we believe that some market corrections, such as hiring freezes and layoffs, will continue. However, both the US and Brazil's Central Banks are signaling interest rate cuts, which is great for riskier assets, such as venture capital.
Top ambitions for the Antler team in Brazil this year:
For Antler in Brazil, 2024 will be a very strong year. Our local fund is closing in the first half of this year, exceeding expectations. As a result of that, we foresee growth on all sides of our operations, especially in our residency program. Throughout this year, we will do two more residencies and we are expecting to see an increase in the number of applications, founders hired, local investments, and the volume of capital invested.
We envision all this progress and growth translating into a more diverse pipeline of startups and founders, while our investment rationale remains the same: we want to support unconventional and disruptive business theses that are focused on solving big and real problems in Brazil.
CANADA
NAMAN BUDHDEO and BERNIE LI, Partners (Toronto)
"While the environment is ripe for growth and investment, founders need to adapt to a more discerning and value-driven VC landscape in 2024."
Most exciting sectors for 2024 and why:
From our perspective an investor with a keen eye on the Canadian startup landscape for 2024, the AI sector emerges as an exhilarating prospect, and here's why: Canada has diligently sown the seeds of AI innovation through substantial R&D investments, fortified by a strategic federal pan-Canadian AI initiative. The recent surge of over $8 billion in venture capital inflows toward Canadian AI startups between 2022-2023 exemplifies the financial confidence converging into this burgeoning sector. Moreover, the amplification of diverse use cases clamoring for AI-based solutions underscores a palpable market demand. What truly captivates me is the convergence of exceptional Canadian talent, steeped in AI expertise, within arm's reach of enthusiastic capital hungry for AI innovation. This convergence primes Canada to unlock significant value in pioneering the next wave of AI technology.
Challenges and/or opportunities founders will face in Canada in 2024:
We believe 2024 will be a dynamic year for founders and they will face different challenges and opportunities depending on their stage.
There are still many difficulties at growth stage investing but we are starting to see investing picking up after being on the sidelines for most of the last 18 months. In Canada there are many seed VC funds that raised from LPs prior to the tech downturn and have been on the sidelines. There is therefore a lot of dry powder that needs to be put to use and we will see seed investing increase this year.
In many regions, innovation and technology is supported by the government. The return of Venture Capital Catalyst Initiative (VCCI) to Canada that provides funding for fund of funds is a significant boon, offering deep capital infusion into the VC sector and, consequently, more investments in founders and companies.
However, founders must also navigate certain challenges. The landscape of seed investing is evolving, with valuation expectations recalibrating to more conservative figures compared to the pre-downturn era. Additionally, the diligence process undertaken by VCs has become more rigorous, reflecting a shift away from the previously prevalent FOMO-driven investment strategies. Founders should thus be prepared for a more meticulous scrutiny process and set realistic expectations regarding company valuations.
Overall, while the environment is ripe for growth and investment, founders need to adapt to a more discerning and value-driven VC landscape in 2024.
Will 2024 see the start of the recovery or will the downturn continue?
It appears that 2024 holds promising signs for the start of an economic recovery. With inflation expected to be under control, the anticipation of rate cuts could serve as a catalyst for growth in alternative investments. As interest rates decrease, the venture capital sector is likely to become increasingly attractive to investors. This shift could lead to enhanced capital flow into riskier investments like technology startups, potentially driving up valuations. The combination of a stable macroeconomic environment and a more favorable investment landscape suggests a positive outlook for the recovery in 2024.
Other trends we'll see in VC within Canada:
In the Canadian venture capital market, a significant trend expected to emerge is a heightened focus on climate technology investments. The Canadian government's strong commitment to combating climate change positions the country as a fertile ground for climate tech companies. This governmental support, combined with the global emphasis on sustainable development, provides a substantial opportunity for growth in this sector. Echoing the sentiments of BlackRock CEO Larry Fink, who stated a few years ago that the next 1,000 unicorns could emerge from the climate tech space, Canada is well-placed to be at the forefront of this trend.
Top ambitions for the Antler team in Canada this year:
Nothing changes for us in boom or bust times at Antler. We always look for the best founders in Canada who we build great companies in any environment. Canada needs more founders and more tech companies and our ambition is that we will make the most investments into founders in our history.
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EUROPE
Central Europe
ALAN POENSEGEN, Partner (Berlin)
"There will be more innovation and subsequently opportunity for entrepreneurs. This means it will actually be easier to build in 2024."
Most exciting sectors for 2024 and why:
I’m expecting to see innovation continue in B2B software and deep tech throughout 2024. Antler backed more B2B software startups in Europe than ever before in 2023 and we’re seeing lots of great technologies being developed by high quality founding teams.
Challenges and/or opportunities founders will face in Europe in 2024:
I think the main challenges for founders will be the same as ever: build great products, build great teams, convince others to come on board for seemingly crazy ideas. 2024 will be no different.
The thing that fundamentally excites me is that the rate of technological change is accelerating, which means there will be more innovation and subsequently opportunity for entrepreneurs. This means it will actually be easier to build in 2024.
Two very obvious examples are:
- We see a change in the software stack the world operates on with the maturing of AI. This means a lot of the software innovation of the last 20 years will evolve significantly. For example, LLMOps and developer tools needed to build all this have come out of nowhere; paradigm shifts in cybersecurity; etc…
- Hardware innovation is becoming massively easier. 3D printing reaching maturity; the computing power to enable testing through simulations as opposed to physical testing; the decrease in cost of key components such as advanced sensors or programmable chips. All of these are things that have been advancing over the last decade but together have a strong compounding effect means that a lot more hardware innovation can come from entrepreneurs as opposed to large corporate R&D.
Will 2024 see the start of the recovery, or will the downturn continue?
Fundraising for later-stage companies will remain tougher than it was a couple of years ago, as will getting money from consumers and companies to buy your product.
Top ambitions for the Antler team in Europe this year:
For Antler, in 2024 I expect to see more and more great companies emerging and some of our earlier investments getting bigger and bigger.
RJ SCHUURS, Partner (Amsterdam)
"The battle for talent will continue raging. But there is a real opportunity for (pre-)seed stage which might be able to attract great talent."
Most exciting sectors for 2024 and why:
This is a great time to be a tech founder and there are lots of sectors that are attracting significant investment at the early stage. In 2024, we will see more and more innovations in climatetech, deep tech, and e-commerce.
I am also still excited about fintech. While 2023 was a difficult year for fintech and investment into the sector fell, there is still plenty of potential for digital disruption in finance.
Challenges and opportunities founders will face in Europe in 2024:
At (pre-)seed stage I think there is a great opportunity to stand out when raising from VCs if you can show you have in-depth knowledge about a specific space that allows you to reveal the ingredients of the magic sauce you are producing. If you can tangibly demonstrate that your business model can be profitable relatively soon, or at least generate solid unit economics, this will help you also raise funds in 2024.
This is important as the major challenge will remain capital, and I believe even more so for companies that have raised significant capital in the past. I think some VCs might go a bit earlier stage and deploy capital there instead of rescuing a later-stage company that has a huge burn.
On top of this, the battle for talent will continue raging. But there is a real opportunity for (pre-)seed stage which might be able to attract great talent given the capped upside and layoffs at later-stage companies.
Will 2024 see the start of the recovery, or will the downturn continue?
I’m sorry to say, but I think the "downturn" will continue when compared to the amazing upswing in 2021 and parts of 2022. However, the AI upswing will allow for companies to be build with fewer people and less capital is needed. Solid business models, with solid unit economics, leveraging capital more efficiently is something VCs will look at more.
We could see a focus on businesses that can become big, but don’t need to get to unicorn status within a few years. Businesses that can capture a global niche or can really become an integral part of existing businesses will become more important.
Top ambitions for the Antler team in Europe this year:
Antler should be the single most active VC globally in 2024. We should be doing more investments than we have ever done, where most others will likely do fewer.
The Nordics
LIVIA MOORE, Partner (Stockholm)
"We’ll continue to see a strong anti-recession trend with top talent continuing to make the choice to build their next company during a downturn."
Most exciting sectors for 2024 and why:
The mega-trends within climatetech and AI will persevere in 2024, but I believe we’ll also see the first examples of AI companies failing to get traction and going bust in 2024.
Challenges and opportunities founders will face in Europe in 2024:
A new generation of climatetech founders is emerging across Europe as founders, investors, legacy energy companies and policymakers all look to technology to address the challenge of climate change. However, to support a large number of climatetech startups, the European VC ecosystem will need to adapt to this new sector.
There is a recognized growth trajectory for software companies that VCs easily recognize—from concept to MVP, from sales and revenue growth to global scale. However, climatetech often involves the development and manufacture of hardware. So the early years of a climatetech startup are more likely to involve time spent building prototypes, trialing in real world environments, and organizing supply chains.
This is a much more capital intensive and time consuming process than anything a SaaS startup would experience. Investors require more patience, and more patient capital, to support these businesses.
Will 2024 see the start of the recovery, or will the downturn continue?
Although the blood bath isn’t over yet, and we’ll likely—sadly—see a lot more companies going bust, the tech winter is starting to thaw and there is optimism on the horizon. This is general for VC, but for the very earliest stages where we Antler at operate, I predict we’ll continue to see a strong anti-recession trend with top talent continuing to make the choice to build their next company during a downturn.
Top ambitions for the Antler team in Europe this year:
This will be a very exciting year for Antler in the Nordics with the launch of our first founder residency in Helsinki and the launch of our new Nordic Fund II. We will be able to back more startups in the Nordics than ever before.
United Kingdom
OLLIE PURDUE, Partner (London)
"There are great consumer-facing tech startups in London that could achieve great success."
Most exciting sectors for 2024 and why:
I’m hoping we see an uptick in consumer businesses which get funded. Consumer spending is over 60% of UK GDP yet it feels like over the last year they have struggled to raise money compared to B2B SaaS companies. There are great consumer-facing tech startups in London that could achieve great success.
Challenges and opportunities founders will face in Europe in 2024:
The funding landscape will remain challenging for founders in 2024, but we’re seeing some really exciting Seed and Series A rounds being closed by our portfolio companies in London. A strong founding team, a solid business, and early signs of traction are still a combination that can attract investor interest.
Will 2024 see the start of the recovery, or will the downturn continue?
I think we will start to see signs of recovery throughout 2024. By this time next year there will be more optimism in VC and hopefully more exciting funding rounds closing too.
Top ambitions for the Antler team in Europe this year:
I think in 2024 we should be seeing some big series B/C rounds from our early portfolio companies come through, which is exciting for us having backed them from day zero.
INDIA
NITIN SHARMA, India (Bangalore)
"As long as the [founder's] focus is on innovation, customer value, and sustainable growth, there is absolutely no reason to worry. In fact, this is the best time in history to build a company in/from India."
Most exciting sectors for 2024 and why:
We can look through the lens of three platform shifts that will affect most sectors in India.
- The first (no surprise) is Generative AI, where we are excited not only about new copilots, middleware, and developer tooling ventures built in India for the global market but also areas like Indic (local language) LLMs and completely new ways of engaging Indian consumers in education or agritech, for example. Another angle is how India’s SaaS (projected to be $50 billion in ARR by 2030) and IT services industries adapt to an AI-first world.
- Second, Digital Public Infrastructure (DPI)—which started with the creation of the world’s largest biometric identity (Aadhaar) and interoperable payments systems (UPI)—is becoming India’s unique superpower of sorts. One area where Antler dove deep (and first in the market) in 2023 was Open Network Digital Commerce (ONDC) and related protocols for e-commerce, mobility, educational skills, and the new energy economy. In 2024, this could go BIG, as we expect millions of new buyers and sellers to come online and transact via the ONDC network.
- Third, we expect infrastructure for Web3 to mature and for the space to make a comeback after the “cleaning up” of the last 24 months, and Indian talent will continue to play an important role in the next phase.
- Finally, consumer tech and D2C brands in India evolved a lot in 2022-23, and many showed the path towards efficient acquisition, profitability, and value creation. We’re excited about what comes next, especially in massively underserved or emerging spaces like female health, senior care, or pet care in India.
Challenges and/or opportunities founders will face in India in 2024:
In India, we are fortunate to be currently operating in the world’s fastest-growing major economy, one that is digitizing feverishly with a palpable sense of this being India’s “tech-ade.” Demographics, robust growth, geopolitics, and the maturing of the tech ecosystem have increased India’s attractiveness as a destination for capital, talent, and innovation.
In this context, while Indian founders would of course be subject to the same pressures from the global downturn or correction in tech (need for capital efficient growth, longer fundraising timelines, lower valuation multiples), in totality, the opportunities are far larger than the challenges.
Our message to all the day zero founders in our portfolio and programs continues to be the same: Every sector in India creates opportunity for tech-led innovation, and the potential to build in India for the world has never been clearer. As long as the focus is on innovation, customer value, and sustainable growth, there is absolutely no reason to worry. In fact, this is the best time in history to build a company in/from India.
Will 2024 see the start of the recovery, or will the downturn continue?
I believe we are past both the macro cycle for interest rate hikes, as well as the bottoming of the startup fundraising markets, at least in India. There is plenty of dry powder in venture capital that will get invested in 2024-25. We will not go back to the unhealthy bubbles of 2020-21, so fundraising timelines and valuation multiples will likely remain challenged, but there is no dearth of capital for strong founders building with good fundamentals. For early-stage tech, in particular, the enthusiasm for generational platform shifts (AI, DPI, etc.) will likely outweigh other concerns.
Other trends we'll see in VC within India:
In India, we have produced a $200 billion services industry (1990s onwards) and now a large software products industry ($50 billion in SaaS ARR by 2030), but we still haven’t produced a large platform company (like Google or Amazon). It finally feels like the seeds are being sown for such a $100 billion or trillion dollar platform to emerge in the next 10 years—perhaps in AI, digital public infra, climate, or Web3.
Three other observations:
- Regulation. 2024 is an election year in India, so we may not see landmark legislation, but as we saw in 2023, the government will (often rightfully) play a far more active role in regulation, especially around fintech (all forms of credit, P2P).
- Domestic SaaS. The conventional view has been that Indian businesses will not pay for software, but this is changing significantly, and 2024 might be a year when the domestic SaaS opportunity becomes clearer.
- Sustainability. 52% of India’s population is made up of millennials or GenZs, and India now has 116 million GenZ customers who are far more conscious of climate change and sustainability as they spend their disposable income. The pie for sustainability-focused ventures in India is growing faster than many realize.
Top ambitions for the Antler team in India this year:
- We are aiming to double our investment pace in India, much of it via a revamped Antler India Residency.
- Second, we are excited about 30+ of our portfolio startups who will aim to reach next stage milestones and/or funding rounds in 2024.
- Third, we are looking forward to expanding our pan-India footprint with physical presence in the Delhi NCR region.
- Fourth, we hope to take the Antler brand in India to the next level, with our innovative properties: Before Day Zero, Theory of Next, and Next100.
- Lastly, 2024 should also see us expanding our work to help Indian startups looking for global go-to-market opportunities, especially in the US.
JAPAN
TOMO TAKADA, Partner (Tokyo)
"The Japanese startup ecosystem is attracting global investors...This trend is expected to continue as the Japanese market gains more international recognition."
Most exciting sectors for 2024 and why:
For the Japanese market in 2024, I am particularly excited about three sectors: climatetech, healthcare, and AI.
Climatetech is emerging as a vital response to climate change, focusing on new startups dedicated to carbon technologies and carbon credits. The commitment of the Japanese government to achieve carbon neutrality by 2050 is propelling investments and innovations in this field. A prime example is Spiral Pleasure's development of DMRV (Digital, Measurement, Reporting, Verification) software, which introduces innovative methods for certifying and measuring carbon credits. Additionally, international initiatives like the U.S. Infrastructure Restraint Act are stimulating interest in Climate Tech in Japan.
In the healthcare and medical devices sectors, Japan offers distinct opportunities, particularly due to its aging population and the government's commitment to investing in technologies that mitigate workforce challenges. Despite the inherent risks in pharmaceutical startups, especially those requiring long-term investments, there are promising prospects in areas that bypass the need for extensive clinical trials.
To address Japan's workforce challenges, AI technology is playing a pivotal role. The application of AI is transforming industrial operations, enhancing productivity and efficiency. For example, companies like Guide Robotics and Muse are utilizing AI in logistics to develop human-centric robots. The widespread adoption of AI technology across various sectors in Japan demonstrates its potential to improve efficiency and foster innovation. Additionally, Elucile is leveraging generative AI to promote creative activities, offering services that stimulate inventive endeavors. The use of AI is leading to the creation of more sophisticated services and solutions.
Challenges and opportunities founders will face in Japan in 2024:
Securing skilled professionals is becoming an increasingly significant challenge for Japanese founders, a key aspect that drives innovation and growth in their companies. The burgeoning number of startups vies for a limited talent pool, making talent acquisition a significant hurdle in the tech industry.
Simultaneously, the economic landscape is shifting. The Japanese Yen's historic dip against the U.S. Dollar is influencing large corporations to cut back on expenditures, including spending on POC and vendors. This reduction in corporate spending is affecting startups, particularly those reliant on partnerships and contracts with these larger entities. As a result, some startups are facing difficulties in meeting their year-over-year KPIs, a critical measure of their growth and success.
Moreover, despite the potential benefits of a weaker Yen for overseas expansion, many Japanese entrepreneurs seem to lack either the necessary skills or the interest in pursuing growth outside of Japan. This presents an opportunity where Antler can support Japanese founders.
While we face these challenges, we also have the following opportunities:
1. Japan’s IPO and M&A market comeback. After a cool-down in 2023, the Japanese IPO market is positioned for a recovery in 2024, assuming a global recession is avoided and inflation and interest rates are controlled. The M&A sector also shows potential as a popular exit option, evidenced by recent acquisitions of Japanese startups.
2. Collaboration with corporations. Japanese corporations are increasingly open to and aggressive in collaborating with startups. Most major corporations now have CVCs, direct investment programs, and teams dedicated to open innovation.
3. Government's five-year plan. To accelerate organic growth, the government has announced a plan to boost startup activities, aiming to create 100 unicorns by the fiscal year 2027. This ambitious plan involves providing risk capital, renewing the SBIR program, connecting with global startup ecosystems, offering tax incentives for M&A, and updating stock option regulations.
4. Global investors’ interest. The Japanese startup ecosystem is attracting global investors, as seen in recent investments in growth-stage startups like CADDi, ANDPAD, and Kakehashi. This trend is expected to continue as the Japanese market gains more international recognition.
Will 2024 see the start of the recovery or will the downturn continue?
If the domestic political situation is stable, the focus will be on economic issues and growth.
Other trends we'll see in VC within Japan:
Increased activity by existing VC and PE competitors for investee opportunities and search for LPs. For example, The Carlyle Group recently invested 70B JPY in CureApp. PE funds in Japan have started to invest in Series C and D stages startups and are also becoming LPs for renowned VCs.
Top ambitions for the Antler team in Japan this year:
In 2024, Antler in Japan aims to solidify its recognition and trust as the day zero investor by refining our residency program. We anticipate attracting more exceptional founders, producing outstanding companies, and significantly growing our portfolio companies.
*Thank you to Doug Shinsato and Habib Imam for contributing their thoughts to create this prediction.
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KOREA
JAEHEE CHANG, Partner (Seoul)
"Capital will surely be available, but only for startups demonstrating clear traction and cost-efficiency...In this climate, establishing a demonstrable path to profitability will be the key for startup success."
Most exciting sectors for 2024 and why:
In the realm of AI, two sectors particularly excite me for 2024: specialized language models (SLMs) and edge AI.
SLMs, trained on specific domains like medicine or law, are expected to significantly improve accuracy and performance in specialized tasks. For instance, a medical SLM could analyze vast amounts of clinical data to assist doctors in diagnosis and treatment planning.
Edge AI, processing data directly on devices at the network's edge, promises faster response times and improved privacy. This opens up opportunities for innovative applications in various sectors, such as predictive maintenance in factories, real-time traffic management in smart cities, and personalized healthcare monitoring.
2024 will be a pivotal year for AI, with SLMs and edge AI leading the charge towards a more diverse and impactful ecosystem. While large tech companies undoubtedly drive much of this innovation, their dominance also creates unique opportunities for startups. By focusing on niche applications and leveraging open-source platforms, startups have the potential to thrive by identifying and addressing specific needs with innovative solutions.
Challenges and/or opportunities founders will face in Korea in 2024:
While the cost of capital remains high, dry powder still exists and public initiatives are injecting fresh funds. The Korean government's recent commitment of a two trillion Korean won "Startup Korea Fund" through 2027 signals its continued effort to fuel startup growth. However, it's unclear if this public push will be enough to motivate private investors. Capital will surely be available, but only for startups demonstrating clear traction and cost-efficiency. 2024 will favor bootstrapped, profitable ventures, as even moderate interest rate cuts won't revive investor appetite for exorbitant valuations. In this climate, establishing a demonstrable path to profitability will be the key for startup success.
Will 2024 see the start of the recovery, or will the downturn continue?
2024 will see the start of the recovery, but just at different speeds for different industries. Innovative tech startups in Gen AI and climatetech will continue to attract investors.
Other trends we'll see in VC within Korea:
Expect "global" to be the buzzword in Korean VC for 2024 and beyond. We'll see a surge in strong public-led initiatives aimed at propelling Korean startups into the global markets.
Top ambitions for the Antler team in Korea this year:
In 2024, Antler in Korea will focus on two vital pursuits: keep attracting the top talent to the Antler residency, and empower our portfolio companies for growth and profitability. We aim to connect them with the resources they need to scale and provide strategic advice that helps them navigate the turbulence in their early startup journeys.
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SOUTHEAST ASIA
Indonesia
AGUNG BEZHARIE HADINEGORO, Partner (Jakarta)
"Smaller venture capital firms with experienced founder and operator general partners are likely to outperform larger and more global players due to a more grounded investment rationale and less noise in the deal sourcing."
Most exciting sectors for 2024 and why:
Indonesia has plenty of opportunities in sectors that are currently unorganized, fragmented, and disconnected due to the nature of the business or even the geographical conditions of the market. These sectors include agriculture and food, supply chain, healthcare, or manufacturing. They could benefit greatly from digital services or digitalization of their operations, which would improve their competitiveness as Indonesia's economy continues to grow steadily despite the global slowdown caused by the pandemic.
Indonesian consumption is showing strong growth, despite the impact of post-pandemic inflation. As major e-commerce companies continue to cement their position in everyday life, there is a great opportunity to support the e-commerce and digital services ecosystem, especially with the emergence of new tech stacks like Gen AI.
Challenges and/or opportunities founders will face in Indonesia in 2024:
The funding for startups this year is expected to progress at a slow pace, similar to last year. However, there is the possibility of an improvement towards the end of the year if the macroeconomic conditions improve.
The biggest challenge during this funding winter is navigating through the current tech talent market. Due to mass layoffs by many tech companies over the past two years, there are many talented individuals available in the market. Most of the salary standards have already been heavily inflated over the past five years, and the talent market does not seem to quickly adjust to these changing conditions. As most of the companies that did mass layoffs were quite generous with their compensation, it has enabled most of the talent to keep their salary levels high.
So, most startups are left with the challenge of a slower funding pace yet a high salary market, which is highly challenging for the founders.
Will 2024 see the start of the recovery or will the downturn continue?
Indonesia's economy and consumption are promising, but VC funding is heavily influenced by the US and global conditions.
Other trends we'll see in VC within Indonesia:
After the current funding winter, smaller venture capital firms with experienced founder and operator general partners are likely to outperform larger and more global players due to a more grounded investment rationale and less noise in the deal sourcing.
Top ambitions for the Antler team in Indonesia this year:
To become the team, program, and portfolio that top founders and investors compete to join in Indonesia.
Malaysia
FRANK KANG, Partner (Kuala Lumpur)
"Adversity is expected to intensify their determination [of Malaysian founders], fostering a shift towards more domestic go-to-market strategies while concurrently necessitating efforts to educate and facilitate the adoption of regional and global mindsets."
Most exciting sectors for 2024 and why:
In the dynamic Malaysian startup scene of 2024, sectors like fintech, e-commerce, healthtech, sustainability, edtech, agritech, and AI/ML are attracting significant venture capital interest due to factors such as the growing middle class, increased digital adoption, focus on well-being, environmental awareness, online learning trends, and the pursuit of innovative technologies. Stakeholders should closely monitor these trends in the fast-evolving startup ecosystem.
Challenges and/or opportunities founders will face in Malaysia in 2024:
In the Malaysian startup sector, challenges such as isolation, a domestic mindset, and a lack of later-stage funding highlight the need for increased support for entrepreneurs to access the startup ecosystem and connect with venture capital. Despite these hurdles, the market boasts exceptional talent in specific domains like mobility, F&B, agriculture, climate change, and circular economy, presenting an opportunity to encourage innovative startups.
Post-pandemic, entrepreneurial activity is picking up, with individuals opting for independent ventures and side hustles in response to the investment climate. This trend underscores a resilient entrepreneurial spirit and signals the potential for more innovation, wherein ecosystem builders can play a crucial role in fostering a conducive environment for startup growth in Malaysia.
Will 2024 see the start of the recovery or will the downturn continue?
Malaysia is anticipating a GDP growth of 4-5% year-on-year, and we expect the Bank Negara Malaysia to maintain its policy rate at 3.00% in 2024. The Balance of Payments is set to benefit from higher exports in electrical and electronic sectors, supporting the Ringgit. Envisaging 2024 as an “implementation” year following major announcements in 2023, our overall outlook on Malaysia remains optimistic, driven by economic resilience, strategic initiatives, and promising investment inflows.
In the recent announcement of the 2024 budget, the Malaysian government aspires to rank among the top 20 global startup ecosystems by 2030, focusing on making Kuala Lumpur a hub for digital industry. Initiatives include allocating RM28 million for the MYStartup directory, developed by MOSTI and Cradle Fund Sdn Bhd, and securing RM1.5 billion from GLCs and GLICs for startups in high-growth, high-value sectors like the digital economy, space technology, and electronics. Additional support involves allocating 100 million ringgit over three years to the MALAYSIA CO-INVESTMENT FUND (MyCIF) for startup capital, complementing food security initiatives.
Other trends we'll see in VC within Malaysia:
Malaysian entrepreneurs, fueled by a heightened hunger for success, have long been in the shadows due to a lack of support, expertise, and global platforms, resulting in fewer startup successes compared to neighboring countries; this adversity is expected to intensify their determination, fostering a shift towards more domestic go-to-market strategies while concurrently necessitating efforts to educate and facilitate the adoption of regional and global mindsets. The push for change involves supporting private sector venture capitalists and ecosystem builders to play a more active role in injecting early-stage risk capital at different venture stages, aiming to scale innovation and business, with the vision of a collaborative effort between the public and private sectors as well as local and global entities.
Top ambitions for the Antler team in Malaysia this year:
The Antler residency plays a pivotal role in uncovering and nurturing Malaysia's entrepreneurial talents, offering them a gateway to Antler's extensive global platform and network. By leveraging Antler's vast network of investors, founders, and advisors, this initiative not only introduces fresh opportunities to the Malaysian entrepreneurial landscape but also expedites the growth trajectory of local entrepreneurs and startups, paving the way for international expansion and success. The Malaysian startup ecosystem, brimming with potential, boasts a diverse international talent pool, high levels of digitalization in the region, robust support from both public and private sectors, and unique geographical and cultural advantages. With the Future Malaysia Program, aimed at accelerating the development of the Malaysian startup ecosystem, Antler seeks to make meaningful contributions towards this acceleration, recognizing the wealth of opportunities that lie ahead.
Singapore
WINNIE KHOO, Partner (Singapore)
"Issues like talent acquisition and capital mobilization remain significant hurdles for early-stage startups eager to address pressing problems quickly and effectively."
Most exciting sectors for 2024 and why:
In 2024, the spotlight is definitely on Gen AI. It's an exhilarating time, as we delve deeper into this field. The evolution of Large Language Models (LLMs) is particularly intriguing, promising a wave of innovation across traditional tech sectors like travel, education, and health. It's like watching AI quietly revolutionize these industries from the inside out.
Building the necessary infrastructure is a key focus—we're talking about enhancing data security, refining multi-model DevOps, and optimizing architecture. This is crucial for supporting the integration of AI across various tech stacks. These tools need to be able to be applied eventually to not only AI implementation so that all code stays under one house.
On a creative note, I'm excited to see AI's impact on content creation. The idea of generating diverse content formats—from written works to videos, movies, TV, and 3D models—using AI is fascinating. It's about bringing personalized content creation at mass to a whole new level.
Challenges and/or opportunities founders will face in Singapore in 2024:
Singapore continues to be a dynamic hub for technology in Southeast Asia, with the potential to become a significant player on the global tech stage. The impressive growth in sectors like AI and data centers is a testament to this potential. (Singapore alone takes 15% (2.7b) of Nvidia Q3/23 earnings with a 404% growth rate from the year before, outpacing overall growth rate of 200%.)
However, founders here face unique challenges, particularly in scaling technology businesses within the diverse and fragmented SEA market. Issues like talent acquisition and capital mobilization remain significant hurdles for early-stage startups eager to address pressing problems quickly and effectively.
Will 2024 see the start of the recovery or will the downturn continue?
The investment landscape in 2024 will likely be characterized by cautious optimism. Investors will be selective, but the need to deploy funds within specific timeframes will create a sense of urgency. This environment may lead to a greater reliance on data-driven decision-making, streamlining the investment process and potentially leading to more strategic and efficient funding choices.
Other trends we'll see in VC within Singapore:
Data and AI are set to play a pivotal role in venture capital decision-making. This shift could lead to more individualized investment strategies, moving away from traditional group-think approaches.
As the founder community in Southeast Asia matures, VCs will need to adapt, offering more than just financial support and focusing on building relationships and providing tailored value to startups. The older mentality of the “cash is king and so am I” approach needs to be more of a collaborative effort and partnership between the founders and their board.
Top ambitions for the Antler team in Singapore this year:
For Antler, as a front-runner in early-stage investing, our ambition is to continue being the go-to source for identifying emerging tech trends. We aim to be the hub that people turn to for insights into the next big thing in technology.
Alongside this, our goal is to foster a team environment where personal and professional growth is prioritized, ensuring that our work is not only impactful but also fun as hell.
Vietnam
ERIK JONSSON, Partner (Ho Chi Minh City)
"Quick traction and proof of concept will continue to hang over founders’ heads as they raise further rounds."
Most exciting sectors for 2024 and why:
While many economies saw a tough 2023, Vietnam remained quite resilient in terms of macro indicators. Domestic consumption, public investment, and export growth recovery will drive much of Vietnam’s growth in 2024, the main question mark being about the relative condition of key trading partners such as the US. This trickles down to a continued particular excitement for B2B solutions that help underpin and augment key areas of the economy such as manufacturing and logistics. Our portfolio companies like Inflow, Wareflex, Buyo, and Alterno are great examples of this.
Challenges and/or opportunities founders will face in Vietnam this year:
Quick traction and proof of concept will continue to hang over founders’ heads as they raise further rounds. Those who focus on B2B solutions with the inherent longer sales cycles will need to hunker down to avoid going belly up before they can successfully raise.
Will 2024 see the start of the recovery or will the downturn continue?
For Vietnam specifically, I believe 2024 will see the start of a recovery. We saw early indications of this at the end of 2023 and I am positive that we’ll move towards greener pastures.
Other trends we'll see in VC within Vietnam:
I think we will revert to fundamentals in a way, for lack of a better word. AI will remain a strong trend for our forthcoming 2024 cohorts as a core technology, but the titillation of LLMs will be over and instead a greater focus will be placed on “less sexy” fundamental business applications.
Top 2024 ambitions for the Antler team in Vietnam:
Finding better founders and teams, period. We are beefing up our scouting efforts with a new key hire and overlaying that with regional best practices to ensure that 2024 will see our strongest program rosters yet.
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UNITED STATES
RYAN SOMMERVILLE, Partner (Boulder)
"Standards for late-stage rounds will remain very high—VCs will continue to disproportionately prioritize their promising portfolio companies over new deal flow. Capital efficiency will be key and encouraged if not mandated by venture investors."
Most exciting sectors for 2024 and why:
Artificial Intelligence (AI) startups will continue to be an investment focal point in 2024— however, there will be an increasing bifurcation between startups using AI to solve a core problem and the Gen AI hype cycle we’ve witnessed over the past two-plus years. We’ll begin to see indications of the long-term winners—from the Magnificent Seven to maturing private companies.
The significant advances we’ve seen in AI over the past few years will fuel more R&D capital into deep tech companies leveraging AI software to support more resource intensive projects (space, defense, life sciences, etc).
Healthtech advances (from preventive health & wellness to direct care) will have a watershed 2024. We’ve been talking about the aging of America for years, capacity on the health system, etc—we’re now starting to really feel it and the incentives to get more efficient and effective with delivering care are certainly there, from the government on the entitlements burden to insurers, hospital systems, businesses, and consumers.
Challenges and/or opportunities founders will face in the US in 2024:
Standards for late-stage rounds will remain very high—VCs will continue to disproportionately prioritize their promising portfolio companies over new deal flow. Capital efficiency will be key and encouraged if not mandated by venture investors.
New deals beyond Series B will continue to have a considerably higher bar for investment relative to the last credit cycle. We’ll see continued price compression and companies that raise at the heights of 2021 will need to go back to market for capital. They’ll likely face headwinds and greater need for restructuring. On a related note, we’ll also see more consolidation and increased M&A activity.
Will 2024 see the start of the recovery or will the downturn continue?
Relative to the run we’ve been on for the past decade, 2023 was a tough year for capital markets—particularly venture capital. The (private market) tech sector faced significant headwinds, impacted most notably by a high interest rate environment, but also geopolitical tensions and increased macro uncertainty. Fund commitments decreased considerably and venture funds were resultantly more risk-off, creating downward pressure on start-ups. However, amidst this the US economy displayed shocking resilience (S&P 500 +20%—mostly driven by the tech sector, steadying inflation, moderate unemployment), encouraging fairly reasonable optimism regarding a soft landing.
My take on this is two-fold:
Most notably, the economy is still riding high on historic levels of monetary stimulus coupled with 2023 fiscal stimulus that eased the potential pain of monetary tightening. It typically takes 1.5-2 years for real interest rates to hit the general economy. The impact of AI is a significant tailwind for market confidence in US productivity—particularly affecting the innovation sector.
By my lights, 2024 will be a similar year. Downward pressure will continue, driven by real interest rates truly affecting the broader economy, limited easing of monetary policies, no clear end in sight for geopolitical volatility, and a contentious US election cycle. Nonetheless, the technology sector will thrive—largely driven by the promise of AI. Dry powder remains abundant in private markets, and funds are motivated to deploy capital, with bear markets historically being outperforming vintages for venture capital. Limited Partners will likely act accordingly and are forecasting increased allocation to alternatives. Most importantly, a growing number of our best and brightest are pursuing entrepreneurship—it’s never been easier to start a tech company than 2024.
Top ambitions for the Antler team in the US this year:
Identifying and investing in the highest quality founders is the top priority. If we can devote all our efforts to sourcing & adding value to founders, Antler will be successful.
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