In 2023, the tech world experienced a dynamic mix of groundbreaking AI advancements and formidable fundraising challenges, marking a year of significant innovation and venture capital recalibration.

It was another wild and exciting ride in tech.

At Galileo, we have continued investing in exceptional emerging founders. From backing founders building the new AI tools and the AI workforce, companion robots, fixing climate credits or revolutionising aviation with electric power, our founders continue to create new technologies, regardless of market cycles.

We’ve also focused on creating more opportunities for early-stage founders – launching Jupiter, our first pre-funding founder program for women in tech. Our 2nd cohort is starting in the beginning of 2024 so register today!

At Galileo, we have been focused on creating more opportunities for early-stage founders and helping founders stay resilient through a tough market.

Galileo Highlights:

• Relevance AI raised $15m to build the platform ‘AI Workforce’ – our largest funding round to date in the portfolio. We share our thoughts on the journey so far here.
• We’ve invested in AI, 3D worlds and climate tech (stay tuned for announcements in 2024).
• Had our first acquisition with Steppen being acquired by Alta Global 
• Tixel landed in The Australian's Top 100 Innovators list for 2023 🏆😍

What we know to be true - Advice to founders going into 2024 

Be disciplined and focus on the fundamentals:

For the past few years, everyone (VCs included) has been moving at record speeds. Take a step back and reevaluate your business plan. 

What is your product roadmap and prioritisation plan? How crisp is your go-to-market strategy? Good planning and execution will be key over the next few months and years as companies adapt to changing market needs.

Cut your burn: 

This year was a tougher year for fundraising founders. We spent the year assisting founders with cost-cutting and reducing burn to buy enough time (to earn the right) to fight and win. 

Yes, growth at all costs sounds great, but in reality, at the seed stage you simply can’t afford it, and it’s unsustainable. If you need to extend the runway you need to reduce headcount and salaries, forecast try to spend as efficiently as possible, negotiate payroll 

Investors want to see sales:

Founders that can show strong adoption and sales growth will have a much better chance at raising. Raising off a product MVP or free users alone wont cut it in 2024. Putting in a sales process early and signing on customers for testing or alpha trials are things we look for in pre-seed funding.

Going into 2024

James (Galileo Partner):

I think we’re heading into a new era in tech and 2023 was just the beginning. What is this era called? I’m not sure, but its probably going to involve AI and its impact (I just don’t think it will be called the ‘era of AI’).

LLMs and AI are changing how we create and think about software.

My prediction is that we’re going to see even bigger changes in 2024 as AI agents become more popular and we really start to see some autonomous use-cases emerge in business and consumer applications. Open source models will get more powerful and challenge the status quo and entrepreneurs will find more creative ways to utilise these models in all industries.

On the investment side, VCs will get back to investing and the pace will pick up in 2024. VCs have cash to deploy and the confidence and risk tolerance will come back, to a degree.

Overall, I think there truly has never been a better time to be a founder!

Hugh (Galileo Partner):

My prediction for 2024 is everyone gets back to work.

2023 has been this period of weeding out the things in tech that have not worked. For example, companies that are too big have had to make cuts, or companies that have gotten too big too quickly without the right business fundamentals will have to change how they operate to survive.

Also, I think next year is when we'll start seeing that combination of increased cost of living and inflation flow through. A lot of people have quite reasonably been quite uncertain in how they've made decisions in 2023. Even from an employee perspective, such as what company they choose, do they want to go for an early-stage company or a late-stage company with a bit more certainty or do you avoid tech together with the layoffs that have been happening?

2023 has some ways feels like it's been another COVID. Next year is hopefully when we'll have the coming out of COVID moment with the ‘new, new normal’

Luddy (Galileo Head of Platform):

A drop in bridge rounds - 2023 was full of extensions as investors gave additional cash to their current portfolio companies in the hopes of helping them get by until the next primary round.

I expect VCs will be less generous to current portfolio companies next year—but hopefully, this means more cash devoted to new companies.

That's all from us this year. See you in 2024!