The great Silicon Valley shake-out

street in downtown San Francisco sit the former headquarters of Fast, a maker of check-out software for online merchants. The offices look quiet; a for-let sign hangs above one of the windows. That is a departure from its management’s flashy habits. Last year at an event announcing Tampa as its East Coast hub, the firm splurged on backflipping jet-ski riders and pickup trucks straight from the race track. Fast had set investors’ pulses racing, too. It raised $125m between 2019 and 2021, including from some of Silicon Valley’s most astute venture capitalists at firms like Kleiner Perkins and Index Ventures. Then, in April, having burned through its cash and being starved of fresh capital, Fast went bust. Fast’s demise is a sign of that the years-long startup boom is going through a sharp correction. Soaring inflation, supply-chain chaos and the war in Ukraine are causing a wave of uncertainty to wash over the global economy. It is buffeting young tech firms particularly hard as the present value of their profits, most of which lie far in the future, are being eroded by rising interest rates. “It’s like a stun grenade has hit the market,” says one Silicon Valley veteran. And the shock is rippling through the venture-capital () industry, which tries to identify and nurture the next Google.