During 2021’s first quarter, technology start-ups garnered $69 billion from investors, 41 percent more than in the previous quarterly record set in the last three months of 2018, according to Pitchbook Data.
The typical valuation for new ventures has more than tripled from last year’s, the research firm noted, with late-stage start-ups now averaging $1.6 billion.
New ventures seeking cash are being offered five times what they ask and deals can close in days instead of months, venture capitalists and entrepreneurs told the Wall Street Journal.
The companies are going back to raise more cash every few months instead of every couple of years, and the companies’ valuations are rising each time, they said.
Many of the companies sitting atop this new bubble are social media apps, such as Discord, a chat service; Stationhead, which allows users to create their own radio shows; or Patreon, where anyone can publish their creations in hopes of making money.
Clubhouse, another self-publishing site, was valued at $1 billion during a funding round early this year when the business was less than a year old; today, its negotiations for more cash are valuing it at $4 billion, insiders told Bloomberg.
Software start-up OfficeTogether raised its first round of $2.3 million in three weeks, founder Amy Yin announced.
TREND FORECAST: As we have long been noting – and warning: Equity markets and economies have been artificially pumped up with monetary methadone. As start-ups, SPACs, and other gambling gimmicks accelerate, equities have entered a 2021 dot.com scam bubble.
Our best estimate is that markets will implode by year’s end.
