Thousands have lost their jobs as the 2022 fundraising winter deepens. This year alone, massive layoffs by tech companies have surpassed the levels of the Great Recession the world experienced between 2008 and 2009, starting with the collapse of Lehman Brothers.
In 2008, technology companies laid off about 65,000 employees, and in 2009 an equal number of workers lost their livelihoods, according to data from Challenger, Gray & Christmas, a global migration and relocation company. .
By comparison, more than 1,000 technology companies worldwide laid off more than 152,000 workers this year, surpassing the levels of the 2008-09 Great Recession.
More than 91,000 workers in the US tech sector will be laid off in mass layoffs in 2022, according to a Crunchbase tally.
In India, more than 17,000 tech employees, led by edtech companies such as BYJU’s, Unacademy and Vedanta, have opened their doors.
Flipkart CEO Kalyan Krishnamurthy has warned that the startup ecosystem funding winter could last another 12 to 18 months and the industry could face “a lot of turmoil and volatility.” I’m here.
Shiprocket and OneCard were the only two Indian startups to reach unicorn status (values above $1 billion) between July and September, according to a PwC India report.
Rushit Shah, co-founder of DevX Venture Fund, said:
A startup funded at an astronomical valuation got its reality checked by the market and regained its sanity.
“Reducing burns happened to be the new mantra, leading to layoffs in the education technology sector, especially in dark environments,” Shah told IANS.
According to Shrijay Sheth, founder of legalwiz.in, 2023 will be a continuation year for many and funders will continue to be cautious.
“Both valuation multipliers and funding opportunities will be more conservative. Startups will need to build better unit economics as opposed to growth channels through expensive acquisitions,” Sheth said. says.
Geopolitical issues, global supply chain crises, and other macro issues are expected to prevail.
“For the most part, full-blown funding firms will dominate, while visitors to the VC world will take a breather,” added Sheth.
India saw a significant 35% drop in funding this year, from $37.2 billion in 2021 to $24.7 billion. According to Tracxn, Edtech startups have witnessed a significant drop of 39% compared to the same period last year.
Late-stage investment fell 45% from $29.3 billion in January-November 2021 to $16.1 billion in the same period this year.
According to Yash Shah, co-founder and CEO of Clientjoy, “grow at all costs” is no longer a philosophy investors enjoy.
“During these times, founders need to identify and optimize conversion funnels that directly demonstrate reduced acquisition costs, pushing the company toward at least unit-level profitability, if not full profitability.” There is,” he said.
Ambitious projects that employ talent at the cutting edge of technology and long-term initiatives that are unlikely to succeed are put on hold and prioritized for survival.
“Once this fundraising winter is over, the market will finally change and disciplined founders and top talent will reap disproportionate gains. This is the age of cockroaches, not the age of unicorns.” said Shah.
–IANS
na/arm
(Only the headlines and photos in this report may have been modified by Business Standard staff. The rest of the content is auto-generated from syndicated feeds.)
