by This situation has caused an impressive loss of money. In August, Hopin, a startup that raised more than $1.6 billion and was valued at as high as $7.6 billion, sold its core business for just $15 million. Last month, Zeus Living, a real estate company that received $150 million, announced the closure of its operations. Plastiq, a fintech startup that raised $226 million, filed for bankruptcy in May. In September, light motorcycle company Bird, which attracted $776 million in investment, was delisted from the New York Stock Exchange because its shares were priced too low. Its market capitalization of $7 million is below the $22 million worth of the mansion its founder, Travis VanderZanden, is worth. bought in Miami in 2021.
“As an industry, we need to prepare to hear about many more failures,” said Jenny Lefcourt, an investor at Freestyle Capital. “The more money they received before the party was over, the longer the hangover will be.”
It is difficult to have a clear idea of the dimensions of the losses, since private technology companies are not required to disclose information when they go bankrupt or are sold. Furthermore, the difficult times the industry is going through has been masked by a boom among companies dedicated to artificial intelligence, which has captured the attention of investors and received financing in the last year.
But the truth is that about 3,200 American companies that received entrepreneurial capital have suspended operations this year, according to data collected for The New York Times by PitchBook, which tracks the performance of startups. Those companies had raised $27.2 billion in private financing. PitchBook noted that the data is not total and probably reflects a smaller amount than the total, as many companies stop operating with great discretion. Additionally, they exclude many of the larger collapses that became public companies, like WeWork, or found buyers, like Hopin.
Carta, a company that provides financial services to many Silicon Valley startups, said that 87 of the startups on its platform that raised at least $10 million had closed as of October this year, a number equivalent to double the total. for 2022.
