This situation resulted in an impressive loss of money. In August, Hopin, an emerging firm that had raised more than $1,600 million and had been valued at $7,600 million, sold its core business for just $15 million. My passage, Zeus Living, a real estate company that received 150 million dollars, has announced the closure of its operations. Plastiq, an emerging technology finance company that has raised $226 million, has declared itself quiebra en mayo. In September, light motorcycle company Bird, which attracted a $776 million reversal, decided to pay on the New York Stock Exchange, acknowledging that its shares were priced too low. Its market capitalization of $7 million is less than the $22 million worth of the mansion its founder, Travis VanderZanden, purchased in Miami in 2021.
“As an industry, we need to prepare for many more crises,” said Jenny Lefcourt, investment analyst at Freestyle Capital. “The more money you have collected before the party ends, the bigger the return will be.”
It is difficult to get a clear idea of the size of the losses, as private technology companies are under no obligation to disclose information when they are staked or sold. Additionally, the challenging era that beckoned the industry has been masked by a bonanza among AI companies that have caught the attention of inversions and received funding over the past year.
But the truth is that about 3,200 U.S. companies that received capital from an entrepreneur have suspended operations this year, according to data compiled for the New York Times by PitchBook, which follows the pattern of emerging companies. These companies received $27,200 million in private financing. PitchBook reported that the data is not total and likely reflects less than the total amount, so many companies must operate with great discretion. Additionally, we exclude many of the large-cap behemoths that have pivoted to public companies, like WeWork, or meeting buyers, like Hopin.
Carta, the company that provides financial services to many emerging Silicon Valley companies, commented that 87 of the emerging companies on its platform that received less than $10 million had closed as of October this year, a number equivalent to double the total paragraph 2022.