Predictions for 2024: Software and market trends the Dawn team are watching, from AI and VR to compliance

Dawn Capital
5 min readJan 9, 2024

2023 will go down in history as the year Generative AI pushed its way from the engineering suite into the boardroom and permeated every software category. AI startup investments were at an all time high across the globe. According to the State of European Tech Report 2023, 17% of total capital was pumped into European AI / ML startups — rising from 11% in 2022.

The last year marked the start of a major technology shift, and set the stage for an exciting, innovation-filled 2024. This year promises to bring huge developments across the B2B SaaS landscape. Here our team shares their predictions for European software, market trends and top categories to watch, from those instigated by AI and machine learning breakthroughs, to key trends in everything from financial tooling and enterprise compliance to AR/VR.

We’re looking forward to seeing what’s in store…

“We will start seeing a shift in the way software is delivered and consumed”


AI will continue to be a key investment area as well as a disruptor to every software category in 2024. Foundation models will start being commoditised and cost of training will continue to decrease. Value will accrue to hyperscalers, chip makers, open source model providers and highly verticalised players finding lock-ins in implementation, workflows and proprietary data. Enterprise will look not just for quality but also for governance, security and privacy, opting for vendors that offer this. We will start seeing a shift in the way software is delivered and consumed, with natural language processing and hyper-personnalisation taking over more traditional user experiences.

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Financial management tooling for mid-market companies will be an area to watch in 2024.

Small businesses have become much better served in recent years and now have a good range of choice when it comes to managing payments, books and records. But as they grow in scale and organisational complexity, many companies find that the viable range of vendor offerings becomes much narrower. This is a clear opportunity for investment.

We will also see an unbundling of the ERP stack into best-of-breed modules offering consumer-grade UX designed for the mid-market. Here, financial areas including treasury, spend management, and planning are ripe for further innovation, automation, and realising benefits from AI next year.

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“Right now, Computing at the Edge is at an inflection point”


Workloads are shifting towards the edge, and edge compute is at an exciting inflection point for mass adoption.

The dizzying growth of AI, AR/VR and online gaming are driving greater need for real-time processing and low-latency. Compressing tasks like individual personalisation and AB testing into smaller workloads similarly benefit from a performance and cost uplift at the edge. Gartner estimates that 75% of enterprise-generated data will be processed at the network edge by 2025, providing a massive opportunity for software that quickly and cheaply manages bandwidth, facilitates access to compute resources, and ensures the highest level of security.

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Software that can articulate a clear and direct return on investment will continue to do well in an environment where many buyers are watching their spend. We will see the rebirth of bundling as businesses look to simplify their procurement, spend, and software complexity — and solutions that help businesses iterate faster and release better products more efficiently will continue to gain pace. Our portfolio company FlowX.AI is helping businesses do just that!

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“Companies are watching their spend, so solutions helping them iterate faster will do well”


Compliance software will become even more urgent in 2024. Existing European regulations, like GDPR in 2018 and the Whistleblowing Act in 2019, are being supplemented by the recent implementation of NIST standards and the upcoming European AI Act. While compliance is often viewed as necessary but challenging, many still rely on time-consuming, manual, and blunt tools like Excel. Consequently, there’s a growing trend towards adopting dedicated and comprehensive software that provides an integrated point of control and ‘digital compliance office’. These tools streamline compliance processes, save time, and ultimately deliver higher compliance standards.

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Apple’s Vision Pro, set to launch early this year, has the potential to break a cycle of disappointments in the VR/3D industry and dramatically alter its landscape in 2024. With this product, Apple isn’t just introducing another VR headset; it’s gradually redefining how we interact with digital content.

The Vision Pro will offer to take our everyday experiences into a 3D world. This represents a big step forward and should open up the mass market. Think about watching movies in a virtual theatre, or interacting with traditional 2D computer files in new, immersive ways. I’d love to see the 10 files I have on my screen right now open at the same time!

So, although there is still a serious question over whether consumers are ready to integrate VR into their everyday lives, major developments are happening all the time and this is an area to watch. Our own investment, Omi, is already helping e-merchants take their products 3D, and we’re excited to see this next chapter unveil.

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Shifting to the overall European market…

“We’re anticipating a pick-up in deal volume in Europe next year”


“We’re anticipating a pick-up in deal volume in Europe this year. The market has now recalibrated towards the ‘new normal’ on growth in particular, and investors and founders are becoming more aligned in their expectations. This bridging of the expectation gap, along with the fact that technology such as GenAI is providing an operational efficiency to compensate for lower growth, is set to unlock more funding rounds in 2024.”

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If you’re innovating in any of these areas, or just interested in having a chat with our investment team about the software landscape this year, please do get in touch with us through LinkedIn or via email. Thank you for reading!