The last year has been a doozy for several startup tech companies. As production and income is going down, they have been losing many investors. Major investors have been pulling out of companies like Dropbox and Snapchat, which has become a big concern in the field of technology.
With the numbers going down, and the prices going up, there is worry that the tech bubble is bursting. This tech bubble being the formerly high rise of technology and productivity that caused a huge growth in the technology industry. As companies like Apple and Google have consistently put on products that win over the consumers, there is still hope that the bubble may not be completely burst yet, but with the latest hits, it is slowly starting to get to the breaking point.
This venture capital financial bubble has seen some ups and downs over the past year. As several companies have numbers on the low, others are actual improving their sales and continuing to find investors from major banks and companies.
But many of the “unicorns” as they like to call them, which are startup companies that have reached a net worth of over $1 billion, receive their funding through private sectors and investors. This tech bubble has bred tens of unicorns, and these startups have made names for themselves in the world. But as the tech bubble is starting to get poked, some of these unicorn companies may be the ones at risk.
Within the past year, research has shown that investments in these companies went from $12 billion in Q1 to $12.1 billion in Q2, so funding is remotely stable. However, the kicker is that there has been a 5 percent drop in the number of deals and investments being made. So while there is slightly more money invested in the market, the money is not reaching as many of these tech companies.
But from the fourth quarter of 2015 to the first quarter of 2016, venture capital reports have shown a 25 percent decline in in disbursements. This is what is starting to worry people.
Yet, so far, major cities are not feeling the repercussions of this, but certain industries within the tech bubble may start to see the results. The civic technology field, for one, is an area that may be lacking some of the funding they need.
But overall, the tech bubble is still living on in the United States, and the other major countries. While rumors about the bubble float around, the numbers are not necessarily being crunched correctly. While some reports show major decreases in the investments, there are many other areas to remember that the funding comes from, like hedge funds and mutual fund investments, which can help boost the numbers in other areas.
As for now, there is still hope that the bubble can be salvaged, and long as these companies can continue to pull in the investments. The market tends to rise and fall with the seasons, and hopefully as the summer approaches we will begin to see the investors brining their funds back to the tech bubble.
Let’s hope these tech companies can continue to pull investors and keep the economy up to par, at least in this sector.