Investment in tech companies is stalling as valuations fall. Tech stocks are dragging markets lower, pushing the Nasdaq index down 24 per cent this year. Shares in Snap have crashed by two-thirds and Amazon by nearly a third. But start-ups still have reason to be hopeful.
Forecasters believe demand for the tech products and services they provide will increase this year. Despite rising inflation and geopolitical disruption, Gartner is predicting a 4 per cent rise in global spending on IT services and products to $4.4tn. Analytics, cloud computing and security groups should benefit most.
Shrewd start-ups re-evaluated their spending during the pandemic. In March 2020, venture capital firm Sequoia warned founders to think carefully about their cash flow, headcount and capital spending.