The technology-heavy Nasdaq Composite index may be up a fifth this year but the private sector is still getting mauled. Year on year median valuations of late-stage start-ups fell 17 per cent in the first quarter, according to PitchBook data. There is no reason to expect a recovery this year.
Unless it involves buzzy artificial intelligence, investor appetite for risk has waned since late 2021. A barely breathing initial public offering market means no quick exits. Higher interest rates mean pension funds and asset managers who jumped into start-ups when rates were low can find easier gains elsewhere.
Fundraising has plummeted. Last week, Japan’s SoftBank reported that its vast, tech-focused Vision Funds (which invest in public and private companies) invested just over $3bn in the fiscal year ending March 31, down from more than $44bn the previous year.