The incredible data for 2021 tells the story. US startups have raised $330 billion, nearly double 2020’s record $167 billion, according to PitchBook, track private finances. More tech startups pass the $1 billion valuation threshold compared to five years ago combined. The average amount raised for very young startups entering their first major funding round has increased by 30%, according to Crunchbase. And the value of startups – for sale or public offering – has skyrocketed to $774 billion, nearly triple the previous year’s profits, according to PitchBook.
Big money headlines have been made this year. In the space of a few days this month, three privately held startups have achieved staggering valuations: Miro, a digital whiteboard company, valued at $17.75 billion; Checkout.com, a payments company, valued at $40 billion; and OpenSeaa 90-person startup that allows people to buy and sell unusable tokens, called NFT, is valued at $13.3 billion.
Investors have also announced major acquisitions. Andreessen Horowitz, a venture capital firm, says it has raised $9 billion in new money. Khosla Ventures and Kleiner Perkins, two other venture firms, have each raised nearly $2 billion.
The good times have come to the point where warnings of a price drop are sure to emerge. Interest rate hike, expected later this year, and uncertainty over Omicron variant of coronavirus could tech stock price deflation. Shares of startups went public through special purpose acquisition vehicles last year has gone downhill. One of the startup’s initial public offerings scheduled for this year has been postponed by Justworks, a provider of HR software, citing market conditions. Bitcoin price has dropped nearly 40% since its November high.
But startups say that has yet to affect funding for private companies. “I don’t know if I’ve ever seen a more competitive market,” said Ambar Bhattacharyya, an investor at Maverick Ventures.
Even if things slow down momentarily, the big picture remains the same, investors say. Past moments of outrageous deals – from Facebook’s acquisitions of Instagram and WhatsApp to the sky-high private market valuations of startups like Uber and We work – mentioned hot Tech bubble debate In the century. Each time, Mr. Bahat said, he thought the frenzy would eventually return to normal.
Instead, he said, “everything becomes the new normal.”
Investors and founders have adopted an opportunistic mentality, believing that the pandemic has created a once-in-a-lifetime opportunity to shake things up. Phil Libin, an entrepreneur and investor, says the pandemic has changed every aspect of society to the point where startups have made five years of progress in one year.
https://www.nytimes.com/2022/01/19/technology/tech-startup-funding.html Tech startups reach new heights of ice