More than 8,000 startup employees have been cut this month, according to recent data. Let that sink in: In 15 days—in 11 working days—more than 8,000 people have lost their source of income.
The global funding boom in 2021 was unlike anything most of us have ever seen before. While countries all over the world saw surges in venture capital investments, Latin America in particular saw a massive bump in dollars invested.
Following a bumper 2021 that was full of IPOs and mega funding rounds, some of the most valuable start-ups in Europe are now laying off significant numbers of staff and drastically scaling back their expansion plans.
With tech stocks cratering through the first five months of 2022 and the Nasdaq on pace for its second-worst quarter since the 2008 financial crisis, start-up investors are telling their portfolio companies they won't be spared in the fallout, and that conditions could be worsening.
"No one can predict how bad the economy will get, but things don't look good, " the accelerator wrote in a letter that portfolio founders received called "Economic Downturn." "The safe move is to plan for the worst."
Cannabis is still a long way from being legal at the federal level in the United States, but startups in the space -- and their investors -- aren't deterred. Indeed, many are braving a tough journey because they see the potential and opportunity in the long term.
For the past couple of years, startup founders got used to the love they received from venture investors, who seemed to be climbing over one another to secure deals. It's unclear whether this is a bump in the road or a washout, but market participants said to expect at least a slow summer for VC investment.
Tech companies are having a rough month. Startups are announcing layoffs, valuations have dropped in both public and private markets, and venture capitalists are doing fewer deals. The boom-time vibe is over, and tech Twitter is replete with tips on tightening the belt.
After setting a feverish investing pace last year, venture capitalists took their foot off the gas in this year's first quarter. At the same time, valuations largely continued to rise, a dynamic that is causing some investors to expect a price drop for startups this year.
This year's global deceleration of the venture capital market is broad, impacting most startup ecosystems, sectors and stages. In the first quarter of 2022, CB Insights' dataset indicates that some $10.4 billion was invested into global health tech startups. That figure is off 36% from Q4 2021.