Are the glory days over for tech start-ups?
- 2021 was a record year for start-ups with US$671bn funding from venture capital funding.
- Rising interest rates, market volatility, high inflation, record fuel prices & other factors cause investors to spend less on start-ups.
- The Nasdaq has fallen 20% YTD as investors flee growth stocks.
Following a record year for tech start-ups in 2021, raising US$621bn in venture capital funding globally, 2022 is turning out to be a very different story.
During the pandemic, investors had more cash to splash, with many piling into “the next big thing in tech”.
But ongoing volatility in global markets, supply chain disruptions, record fuel prices, inflationary pressures and interest rate hikes have caused investors to rethink their recent investment strategy.
As the Federal Reserve hints at ongoing interest rate hikes to address red hot inflation in the US, investors in high-growth tech firms are getting cold feet.
The Nasdaq has fallen more than 20% YTD as investors flee growth stocks in favour of stocks like financials which will benefit from higher cash rates.
You can read the full story at Grafa
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