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The Unicorn Boom Is Over, and Startups Are Getting DesperateThe billion-dollar startup bubble is deflating, and more than $1 trillion in value is locked up in companies with dwindling prospects.Illustration: Sophi Gullbrants for Bloomberg BusinessweekAs hard as it is to remember, there were buzzy startups in Silicon Valley before the tech world became solely fixated on artificial intelligence. By the time the Covid-era tech boom crested in 2021, well over 1,000 venture capital-backed startups had reached valuations above $1 billion, including fake meat purveyor Impossible Foods Inc., home maintenance marketplace Thumbtack and online-class platform MasterClass. Then came a squeeze sparked by rising interest rates, a slowing initial public offering market and the feeling that any startup not focused on AI was yesterday’s news.Packages of Impossible Burger plant-based meat are displayed for sale during the Impossible Foods grocery store product introduction in Los Angeles in 2019.Photographer: Patrick T. Fallon/BloombergA reckoning that has been looming for years is becoming painfully tangible. In 2021 more than 354 companies received billion-dollar valuations, thus achieving unicorn status. Only six of them have since held IPOs, says Ilya Strebulaev, a professor at Stanford Graduate School of Business. Four others have gone public through SPACs, and another 10 have been acquired, several for less than $1 billion. Others, such as the indoor farming company Bowery Farming and AI health-care startup Forward Health, have gone under. Convoy, the freight business valued at $3.8 billion in 2022, collapsed the following year; the supply chain startup Flexport bought its assets for scraps.Some startups feel like the “rug has been pulled out from under them,” says Sam Angus, a partner at the law firm Fenwick & West. “The fundraising reality has shifted.”Welcome to the era of the zombie unicorn. There are a record 1,200 venture-backed unicorns that have yet to go public or get acquired, according to CB Insights, a researcher that tracks the venture capital industry. Startups that raised large sums of money are beginning to take desperate measures. Startups in later stages are in a particularly difficult position, because they generally need more money to operate—and the investors who’d write checks at billion-dollar-plus valuations have gotten more selective. For some, accepting unfavorable fundraising terms or selling at a steep discount are the only ways to avoid collapsing completely, leaving behind nothing but a unicorpse.The fundraising market for startups began to sour in 2022 when, among other things, the Federal Reserve raised interest rates seven times after a decade of historically cheap money. These rate increases led to cost-cutting and industrywide layoffs, a trend that peaked in the first quarter of 2023, according to data provider Statista. Some companies that had been focused on growth shifted their goal to near-term profitability to reduce their reliance on venture capital.Many startups, though, were built to chase growth with little concern for near-term profitability in their early years, assuming they could continue fundraising at increasing valuations. In many cases, that formula no longer works. Fewer than 30% of the unicorns from 2021 have raised financing in the past three years, according to data provided by Carta Inc., a financial technology company working with startups. Of those, almost half have done so-called down rounds, where investors value their companies at lower levels than they’d received in the past.Celebrity video greeting service Cameo, for example, once had a valuation of $1 billion, but it raised money last year at a 90% discount, according to a person familiar with the matter who asked not to be named when discussing confidential information. Financial tech company Ramp has raised two sizable rounds since early 2022 at valuations below the $8 billion it got three years ago.In the best-case scenarios, startups can use capital from down rounds to recover their footing. Contractor software business ServiceTitan Inc., for example, raised money with unfavorable financial terms in 2022, only to exceed that value when it went public in 2024. It now has a market cap of $9.4 billion, in line with its peak private valuation of $9.5 billion in 2021.But job cuts and down rounds can also kick off a vicious cycle. Startups are generally selling investors on stories about momentum, which becomes harder to do once they’ve decided to trade their ambition for fiscal discipline. For employees, a major financial upside of a startup gig is the chance to earn equity; once a company’s value starts dropping, workers with other options tend to start leaving.Startups are taking a range of steps to adjust to their circumstances. Those that are in decent shape can opt to classify new fundraising as a continuation of a previous funding round, sidestepping the uncomfortable reality that their valuation is not growing. Given the environment, such flat rounds are widely seen as a success.Other startups have to take deals that are unfavorable in ways that extend beyond lower valuations. This can mean changes to ownership structure, including deals requiring previous investors to participate or lose their ownership stake. These so-called pay-to-play deals can be unpopular for those being forced to re-up, for obvious reasons; last year Ryan Breslow, co-founder of payments startup Bolt, attempted to raise this type of financing round but was thwarted by objections from large shareholders.Doubling down on a company whose prospects are dwindling, of course, is often a bad bet. The digital pharmacy Truepill was acquired after a pay-to-play round, but for only about a third of its value in 2021, according to PitchBook Data. Some investors regard deals with such bad terms as a sign it’s time to move on. “If the company has to go through one of these, it’s probably toast anyway,” says Jeff Clavier, founder and managing partner at Uncork Capital.Deep-pocketed investment companies, including private equity firms, may buy some of these slow-growing startups. But businesses are simply “not going to fetch the type of valuations investors were giving them back in 2021,” says Chelsea Stoner, general partner at Battery Ventures, which invests in and acquires startups.The remaining optimists can hope that something will spark a new round of techno-enthusiasm, or that a Lina Khan-less Trump administration will goose the acquisition and IPO markets. But Greg Martin, founder and managing director at Archer Venture Capital, says that for many unicorns the only—albeit unlikely—hope is for the market to go crazy again. “Unless we have another irrational valuation environment created by zero interest rates” like we had in the pandemic, he says, many of these zombie unicorns are “going to wind up in the graveyard.”
ESTAMOS ASISTIENDO AL PROCESO DE RENDICIÓN DEL ANGLO EN UCRANIA: DOS DE-DE CON-CON (ADENDA A LA 2.ª PARTE).—(https://www.transicionestructural.net/index.php?topic=2619.msg238406#msg238406)El vicepresidente de EE. UU. humilla a la UE.Visionado imprescindible:https://www.youtube.com/watch?v=GFfiFwiiS_UVersión original no tratada con IA:https://www.youtube.com/watch?v=H535X7FEHaM
America's Office-Occupancy Rates Drop by Double Digits - and More in San FranciscoPosted by EditorDavid on Saturday February 15, 2025 @03:34PM from the office-spaces dept.SFGate shares the latest data on America's office-occupancy rates:CitarAccording to Placer.ai's January 2025 Office Index, office visits nationwide were 40.2% lower in January 2025 compared with pre-pandemic numbers from January 2019.But San Francisco is dragging down the average, with a staggering 51.8% decline in office visits since January 2019 — the weakest recovery of any major metro. Kastle's 10-City Daily Analysis paints an equally grim picture. From Jan. 23, 2025, to Jan. 28, 2025, even on its busiest day (Tuesday), San Francisco's office occupancy rate was just 53.7%, significantly lower than Houston's (74.8%) and Chicago's (70.4%). And on Friday, Jan. 24, office attendance in [San Francisco] was at a meager 28.5%, the worst of any major metro tracked...Meanwhile, other cities are seeing much stronger rebounds. New York City is leading the return-to-office trend, with visits in January down just 19% from 2019 levels, while Miami saw a 23.5% decline, per Placer.ai data."Placer.ai uses cellphone location data to estimate foot traffic, while Kastle Systems measures badge swipes at office buildings with its security systems..."
According to Placer.ai's January 2025 Office Index, office visits nationwide were 40.2% lower in January 2025 compared with pre-pandemic numbers from January 2019.But San Francisco is dragging down the average, with a staggering 51.8% decline in office visits since January 2019 — the weakest recovery of any major metro. Kastle's 10-City Daily Analysis paints an equally grim picture. From Jan. 23, 2025, to Jan. 28, 2025, even on its busiest day (Tuesday), San Francisco's office occupancy rate was just 53.7%, significantly lower than Houston's (74.8%) and Chicago's (70.4%). And on Friday, Jan. 24, office attendance in [San Francisco] was at a meager 28.5%, the worst of any major metro tracked...Meanwhile, other cities are seeing much stronger rebounds. New York City is leading the return-to-office trend, with visits in January down just 19% from 2019 levels, while Miami saw a 23.5% decline, per Placer.ai data.
CitarAmerica's Office-Occupancy Rates Drop by Double Digits - and More in San FranciscoPosted by EditorDavid on Saturday February 15, 2025 @03:34PM from the office-spaces dept.SFGate shares the latest data on America's office-occupancy rates:CitarAccording to Placer.ai's January 2025 Office Index, office visits nationwide were 40.2% lower in January 2025 compared with pre-pandemic numbers from January 2019.But San Francisco is dragging down the average, with a staggering 51.8% decline in office visits since January 2019 — the weakest recovery of any major metro. Kastle's 10-City Daily Analysis paints an equally grim picture. From Jan. 23, 2025, to Jan. 28, 2025, even on its busiest day (Tuesday), San Francisco's office occupancy rate was just 53.7%, significantly lower than Houston's (74.8%) and Chicago's (70.4%). And on Friday, Jan. 24, office attendance in [San Francisco] was at a meager 28.5%, the worst of any major metro tracked...Meanwhile, other cities are seeing much stronger rebounds. New York City is leading the return-to-office trend, with visits in January down just 19% from 2019 levels, while Miami saw a 23.5% decline, per Placer.ai data."Placer.ai uses cellphone location data to estimate foot traffic, while Kastle Systems measures badge swipes at office buildings with its security systems..."Saludos.