Insights from category creators and the investors who believe in them.

VC Predictions: 5 Trends That Will Define 2024

January 22, 2024

As we kick off the year, we remain humbled by—and grateful for—the resilience and the enduring spirit of innovation shown by the founders, operators, and investors in our community.

Looking ahead, we’re excited to see how these five industry trends will benefit from advances in (and adoption of) artificial intelligence and more:

Cloud budgets will benefit immensely from GenAI adoption 

A year ago, Managing Partner Glenn Solomon boldly predicted that “the cloud is still a multibillion-dollar opportunity” in 2023. Learn why he was right—but for the wrong reasons, plus check out his prediction for the coming year: 

Glenn Solomon's 2024 industry predictionsRead on: “GenAI Adoption Will Keep Lifting Up Cloud Budgets”

SMBs will look to AI for increased productivity

As thousands of new business applicants graduate to new business owners, more small and medium-sized business (SMB) owners will seek software solutions that will enable them to manage their finances, sales, marketing, and more. 

SMB owners who embrace AI-enabled or AI-native tools in 2024 will supercharge their productivity—and SMBTech companies powering those tools will benefit from this wave of entrepreneurship. 

Managing Partner Jeff Richards and investor Chelcie Taylor describe how this trend is a testament to the proactive approach of small business owners in integrating modern technology into their operations: 

SMBTech 2024 predictions by Jeff Richards and Chelcie TaylorRead on: “SMBTech Will Supercharge a Record Number of New Businesses”

Startups will adjust who—and how—they hire

From leveraging AI for hiring to adjusting compensation, the way that startups hire in 2024 will change.

Based on working with Chief People Officers and other leaders in GGV Capital U.S.’s portfolio, Jen Holmstrom and Christina Pasanen describe the talent trends to watch:

2024 Talent predictions by Jen Holmstrom and Christina PasanenRead on: “Startups Will Rethink the Who, How & Where of Hiring"

The need for innovation will persist amid cybersecurity consolidation 

In the year ahead, we expect to see more of the biggest players in cybersecurity—and heavyweights coming into the space—fill tech gaps with acquisitions. As security companies race to $100 billion market caps, they’re more incentivized than ever to embrace innovation at these startups rather than let acquired products stagnate. 

Oren Yunger and Dan Cahana take a closer look at cybersecurity acquisitions by incumbents like CrowdStrike and Palo Alto Networks—and what this M&A trend signifies for founders and builders:

Cybersecurity predictions by Oren Yunger and Dan CahanaRead on: “Cybersecurity Consolidation Will Continue in 2024—But Not at the Expense of Innovation”

Check out more insights from Oren, including why AI will be an integral part of security tooling: “Securing Tomorrow: Unveiling the Top Trends Shaping Cybersecurity in 2024” 

Fintech innovators' resilience will pay off

We all know that the fintech sector experienced significant volatility in 2023, including decreased valuations and increased interest rates. However, positive signals are emerging with visible achievements from market leaders such as Affirm*, Stripe, and Nubank: Affirm’s stock price is up 370% from its low in May 2023, Stripe swung back to profit (generating $150 million in operating income in Q3 2023), and Nubank achieved positive net income for the fifth consecutive quarter (reaching $355 million in Q3 2023).

Even when faced with these headwinds, fintech founders have shown remarkable stamina and fortitude in growing topline and making progress on profitability.

Discover why the GGV Capital U.S. fintech team led by Managing Partner Hans Tung believes in remaining hopeful by recognizing the industry’s impressive progress—and grounded by focusing on the long-term opportunity for value creation. For example, there's a much-needed opportunity to build the next-gen SAP and Oracle NetSuite (i.e. a smart operating system for the CFO office of modern enterprises).

We also see an opportunity where AI is playing a bigger role in fintech and finserv. It’s still early days in the age of AI—it feels like the internet circa 1996 and 1997, and we’re very bullish on the opportunities ahead in this trillion-dollar market of value creation.

Read on: “A Pulse on Fintech: Our Perspective and Best Practices from the Fintech Community”

*Represents a company in GGV Capital U.S.’s portfolio