This situation caused an impressive loss of money. In August, Hopin, an emerging company that received over $1,600 million and had a valuation of $7,600 million, sold its core business for just $15 million. That day, Zeus Living, a real estate company that received $150 million, announced the price of its operations. Plastiq, an emerging financial technology company that raised $226 million, reported in May. In September, the lightweight motorcycle company Bird, which participated in a $776 million inversion, already gained in the New York Stock Exchange due to the fact that its shares had an unmasked price. Its market capitalization of $7 million is due to the $22 million house value that its founder, Travis VanderZanden, compró in Miami in 2021.
“Like the industry, we need to prepare ourselves to get into a lot more fracas,” said Jenny Lefcourt, inverter at Freestyle Capital. “Mientras more dinero hayan recibido before the party ends, more long will be the resaca”.
While it is difficult to find a clear idea of the dimensions of the losses, private technology companies are not required to disclose information when it is in demand or for sale. What’s more, the industry’s tough times have been masked by a bonanza among AI-focused companies, which have captured the attention of inversionists and received funding in the past year.
But what is certain is that nearly 3,200 established companies that were receiving capital have suspended operations this year, according to data compiled for the New York Times by PitchBook, which tracked the development of emerging companies. These companies had received $27,200 million in private financing. PitchBook reported that the data is not total and likely reflects less than the total, allowing many businesses to operate with great discretion. Additionally, excluding a large portion of large companies that go public, like WeWork, or by meeting traders, like Hopin.
Financial Services Business Charter of Most Emerging Silicon Valley Companies commented that 87 of the emerging companies on its platform that fetched less than $10 million had been shut down as of October this year, a number equivalent to the double the total. for 2022.