Buzzy AI startups are struggling to command the same valuations from a few years ago. PM Images/Getty ImagesAI startups have raked in over $35 billion in 2024, but many have inflated valuations.VCs say that capital-intensive startups struggling to generate revenue are raising flat or down rounds.It's pushing AI startups to turn to 'acquihire' arrangements and secondary share sales.Down rounds and flat rounds for VC-backed startups have hit an all-time high this year since 2014.And AI startups, which have been the darlings of the tech ecosystem since late 2022, aren't exempt from the trend.Case in point: buzzy startup Inflection AI raised $1.3 billion at a $4 billion valuation in 2023.
Similar Stories to Ai Startups Should Brace For A Wave Of Down Rounds, Investors Say. Here's How It Might Play Out. on Bing News
rkanetkar@insider.com (Riddhi Kanetkar), Business Insider
Tue, 09/24/2024 - 2:22am
Topics: ;window.addeventlistener( ,(function(a){if(void 0!==a.data[ they buzzy ai pm images/getty imagesai when microsoft big tech uk andreas riegler vcs crunchbase startups jasper ai umesh padval adept francesco ricciuti capital vc bi ai inflection ventures insider character wave rounds valuations flat growth ecosystem acquihire told valuation lot phenomenon arrangements revenue raked software means london-based lofty short all-time years sales share secondary high year money acquihires price market problem tag key typical hired companies expensive cash
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