So are we in a startup recession or what?

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I dont know what’s going on in the startup market and it’s a bit of a pain in the ass.

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The large American economy, which is home to the world’s largest tech start-ups and venture capital markets, may be in recession right now. We do not know. To achieve a technical recession, we need two consecutive quarters of negative GDP growth. We got it in the first quarter, when the US gross domestic product fell 1.6% after rising 6.9% in the fourth quarter last year.

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Goldman thinks that we’re going to avoid a recession with a marginal increase once Q2 data stabilizes. Federal Reserve Bank of Atlanta thinks we can fall into a recession. We’ll see, but the smart money isn’t quite sure which direction the economy is headed yet.

The startup market feels the same way. VCs have been sounding the alarm for months now, and the IPO market is as dead as hopes for a post-Brexit boom. It’s easy to find comments from various start-up business participants, both builders and investers, noting that the market is in turmoil and that many upstart tech companies are about to be beaten up.

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There is a good reason for this. The upcoming valuation collapse at Klarna is a good example of how part of 2021 is not being carried over into 2022. Many unicorns are expected to struggle to raise more capital at an affordable price, and so many downgrades and final rounds are expected.

And still.

The amount of funding has decreased, but is far from exhausted. And given that unicorns are still being born at a good pace, how many problems can startups really have?


Credit: techcrunch.com /

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