Indian pop group Bombay Vikings were wrong when they sang “good times are here to stay”. In the tech and venture ecosystem, they are long gone. And for real this time, or so the data seems to suggest.
The slowdown in fundraising activity is quite clear: global funding dipped to $45 billion in April, according to Crunchbase. The lowest since February 2021. To be fair, this is no peanuts either but the idea of what’s big has somewhat been distorted over the last couple of years.
This slowdown is accompanied by a correction in valuations as people who built their entire companies and portfolios around cash burn have suddenly woken up to the fact that profitability is indeed a desirable thing to chase. Tweets from investors and founders on this virtue have begun already, all preaching the need to be quiet and do the sustainable thing, forgetting how their own FOMO (fear of missing out) led to us here in the first place.
With burn rates much higher than what they can continue in the current market and incapable of actually running lean, some startups are turning to that magical formula straight out of the private equity playbook: layoffs. They have already started in the US and rumour mills suggest the coming doom in Pakistan too.
With burn rates much higher than what they can continue at in the current market and incapable of actually running lean, some startups are turning to that magical formula straight out of the private equity playbook: layoffs
Meanwhile, public markets...
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