Skin in the Game: With Eye on AI and Infrastructure, Venture Transitions Toward Corporate Leadership
Setting the Stage
If the defining colloquialism of last year’s State of the Built World Annual Report was “follow the leader,” then this year’s would be “flight to quality.”
Bank runs, inflation, quantitative tightening, strained trade relations with China, conflict in the Middle East, approaching two years since Russia invaded Ukraine, interest rate hikes, and Europe in an energy crisis were some dominant themes of the year that contributed to prevailing market headwinds.
Broadly speaking, 2023 was bleak economically. Early 2024 trading–which historically has been a reliable barometer for investor confidence on the coming year–provides no reprieve as markets have oscillated, waving mixed signals.
Venture Capital Markets
The US venture capital (VC) market hit two-year lows in both deal count and deal valuations. A weak IPO exit market and depressed startup terminal valuations due to high interest rates rendering the two most important profitability levers for startups all but useless.
However, despite a year full of headwinds, the AECO (architecture, engineering, construction, and operating) sector has found a way to push to new highs. Built world VC deal values and counts increased in 2023 compared to 2022.
Yes, you read that right. Read on for insights.