The startups attracted $ 91.5 billion of risk funding in the first quarter, according to the latest report of the PitchBook data provider. This figure not only exceeds the allocation of the previous quarter of 18.5%, but also represents the second highest quarterly investment in the last decade.
Despite this apparently positive news, Kyle Stanford, a Pitchbook’s US risk capital Analyst, seems to be the most bearish on the VC clerk since he started covering this market 11 years ago.
Stanford’s source of negativity? The shattered expectations that 2025 would bring significant exits, creating a cycle in which IPO and great acquisitions would have generated tons of money for investors – and the founders – who would therefore have channeled a lot of money into startup funding. This is, after all, the Silicon Valley Way.
But the volatility of the equity market and the fears of a recession triggered by the tariff policy of President Trump have derail these hopes. Startups do not want to debut on the public markets during a period when the prices of the actions are depressed due to global economic issues.
“The liquidity that everyone hoped does not seem to happen with everything that has gone in the last two weeks,” Stanford said to Techcrunch.
Several companies, including Fintech Klarna and Hinge Hinge of the physical therapy company, have already postponed or, according to what reported, are taking into consideration the possibility of delaying their ipo in the midst of the turbulence of the market.
As for the strong total for the realization in the first quarter, Stanford said that the metric did not paint a complete picture of the excitement of investors for startups.
Of the 91.5 billion dollars collected by the US startups in the last quarter, a stunning 44% has been invested in one company: the $ 40 billion Openi round. Pitchbook also discovered that nine other companies that collected $ 500 million or more, including 3.5 billion dollars of anthropes and $ 600 million isomorphic Labs, represented a further 27% of the total value of the agreement.
“Those offers are really masking the challenges that many founders are facing,” said Stanford. “I think there are many companies that will have to deal with downhill rounds or be acquired for great discounts.”
Investors and analysts have foreseen a widespread collapse of the startups since the Zirp ended in 2022. And many have failed, but other startups have reduced costs and a strong economy has allowed them to continue growing, even if their growth rate has fallen below the expectations of investors. But, as we have previously reported, they are suspended from a thread, with the 2025 expected to be another difficult year for the start arrests.
“If there is a recession, they lose many of their revenue and growth”, which could force them to be sold for cents on the dollar or fail, Stanford said.
Startups and investors were looking for until 2025 for a market turning point, but instead a potentially more rough economy could accelerate the end for many startups.
