After a fat year, tech startups are bracing for lean times

AFTER A STUNNINGNASDAQVCCB run during the pandemic, which put a premium on all things digital, tech stocks have hit a rough patch. The , a technology-heavy index, has fallen by 15% from its peak in November, weighed down by a new outbreak of covid-19 in China and the Russia-Ukraine war, which are gumming up supply chains, and inflation, which erodes the value of future cashflows, making risky growth stocks less attractive to investors. On April 20th the market value of Netflix crashed by a third, or $54bn, after the video-streaming titan reported the first quarterly net loss of subscribers in more than a decade.The bloodletting in public markets has left many wondering about private technology startups. Like their listed peers, they have enjoyed a covid-fuelled bonanza. Thanks in part to new types of investor, such as hedge funds and corporations, ploughing more cash into the sector, last year was a bumper one for venture-capital () deals. According to Insights, a research firm, global tech startups raised $628bn in 2021, more than double the previous year’s tally. In the same period the number of deals jumped by a third, to more than 34,000. Fully 528 private firms became “unicorns”, valued at $1bn or more. Are these rich valuations now also about to take a tumble?