{"id":31423,"date":"2023-07-04T20:55:13","date_gmt":"2023-07-05T00:55:13","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/end-of-easy-money-unicorn-bubble-implodes-normalcy-returns\/"},"modified":"2023-07-04T20:55:15","modified_gmt":"2023-07-05T00:55:15","slug":"end-of-easy-money-unicorn-bubble-implodes-normalcy-returns","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=31423","title":{"rendered":"End Of Easy Money: Unicorn Bubble Implodes, Normalcy Returns"},"content":{"rendered":"
\n

<\/picture>
<\/figcaption><\/figure>\n<\/p>\n

AI hype & hoopla replaces crypto, blockchain, and FinTech hype & hoopla. You\u2019ve got to go with the times.<\/strong><\/p>\n

In the second quarter 2023, only 12 venture-capital-backed startups in the US became \u201cunicorns\u201d: meaning they received funding that valued them at over $1 billion. In Q1, 9 startups became unicorns in this manner, the lowest since January 2018, according to the quarterly unicorn tracker by PitchBook.<\/span><\/p>\n

In Q3 2021, the peak of the easy money unicorn startup bubble, 95 startups became unicorns. In the year 2021 \u2013 the last year of the Fed\u2019s easy money \u2013 a total of 362 new unicorns appeared in the US, with a combined valuation of nearly $1 trillion!<\/p>\n

The Fed began hiking rates in Q2 2022, and the number of unicorns plunged by 36% from the prior quarter to 59 new unicorns. In Q3 2022, there were only 32 new unicorns.<\/span><\/p>\n

By Q1 2023, with the Fed\u2019s interest rates approaching 5%, unicorn creation plunged by 90% from the peak, to just 9 new unicorns. And now the top end of the Fed\u2019s rates is 5.25%, and more rate hikes are coming. So some kind of normalcy is returning to the startup scene:<\/p>\n

\n

\"Unicorn <\/picture>
<\/figcaption><\/figure>\n<\/p>\n

So 12 unicorns being created in a quarter is pretty good in normal times. But during the Fed\u2019s easy money bubble, everything and anything became a unicorn.<\/p>\n

As you\u2019d expect, given all the hype and hoopla about generative AI, five of the 12 newly minted unicorns in Q2 (42%) came with \u201cartificial intelligence\u201d labels.<\/p>\n

By contrast, during Q3 2021, the peak of the unicorn bubble, only 17% of the 95 new unicorns had AI labels. As you\u2019d expect, popular labels back then were Crypto, Blockchain, Fintech, AdTech, Saas, Marketing Tech, Clean Tech, etc. Hype-and-hoopla has got to go with the times.<\/p>\n

Valuations plunged<\/strong><\/h2>\n

In Q2 2023, the 12 new unicorns had a combined valuation of $15 billion, the lowest since Q4 2016, which caused the average valuation per unicorn to plunge to $1.2 billion, the lowest in the PitchBook data going back to Q1 2016.<\/p>\n

By contrast, in Q1 2021 \u2013 with the Fed\u2019s easy money policies in full swing with near-0% interest rates and $120 billion a month in QE \u2013 the 82 new unicorns had a combined valuation of $327 billion, for an average valuation of $4.0 billion per unicorn.<\/p>\n

\n

\"Combined <\/picture>
<\/figcaption><\/figure>\n<\/p>\n

The Fed hiked rates, unicorn bubble imploded<\/strong><\/h3>\n

By now, the stocks of hundreds of former unicorns and less-than-unicorns that had managed to go public during this easy money bubble via IPO, direct listing, or merger with a SPAC, have collapsed and have become heroes in my pantheon of Imploded Stocks.<\/p>\n

Given this backdrop, and given the hundreds of billions of dollars that gullible retail investors lost on this hype-and-hoopla show, it\u2019s now difficult for iffy outfits to pull off overpriced IPOs and SPAC mergers.<\/p>\n

And big corporate buyers have cut back too. And so the exits for VC firms and other early investors \u2013 when they\u2019re able to sell their stakes to others at a huge profit \u2013 are just about closed.<\/p>\n

This has had a sobering effect. It put a damper on VC funding overall. It brought down valuations. It led to funding rounds at lower valuations than prior rounds \u2013 the dreaded \u201cdown rounds.\u201d It allowed recent investors to impose terms that are much more favorable to them, and less favorable to the earlier investors, founders, and other stakeholders.<\/p>\n

These are signs that some sort of normalcy might set in again \u2013 a dreaded concept after years of easy money that made everything possible and led to some of the worst and costliest decisions and capital misallocations all around.<\/p>\n

Original Post<\/em><\/p>\n

Editor’s Note:<\/strong> The summary bullets for this article were chosen by Seeking Alpha editors.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

AI hype & hoopla replaces crypto, blockchain, and FinTech hype & hoopla. You\u2019ve got to go with the times. In the second quarter 2023, only 12 venture-capital-backed startups in the US became \u201cunicorns\u201d: meaning they received funding that valued them at over $1 billion. In Q1, 9 startups became unicorns in this manner, the lowest […]<\/p>\n","protected":false},"author":1,"featured_media":31424,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[236],"tags":[83],"class_list":["post-31423","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-news","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nEnd Of Easy Money: Unicorn Bubble Implodes, Normalcy Returns | iFintechWorld<\/title>\n<meta name=\"description\" content=\"AI hype & hoopla replaces crypto, blockchain, and FinTech hype & hoopla. You\u2019ve got to go with the times. In the second quarter 2023, only 12\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=31423\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"End Of Easy Money: Unicorn Bubble Implodes, Normalcy Returns | iFintechWorld\" \/>\n<meta property=\"og:description\" content=\"AI hype & hoopla replaces crypto, blockchain, and FinTech hype & hoopla. You\u2019ve got to go with the times. In the second quarter 2023, only 12\" \/>\n<meta property=\"og:url\" content=\"https:\/\/ifintechworld.com\/?p=31423\" \/>\n<meta property=\"og:site_name\" content=\"iFintechWorld\" \/>\n<meta property=\"article:published_time\" content=\"2023-07-05T00:55:13+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-07-05T00:55:15+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/07\/1688518513_image_1371055972.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1536\" \/>\n\t<meta property=\"og:image:height\" content=\"1024\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"News Room\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"News Room\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/ifintechworld.com\/?p=31423#article\",\"isPartOf\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=31423\"},\"author\":{\"name\":\"News Room\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61\"},\"headline\":\"End Of Easy Money: Unicorn Bubble Implodes, Normalcy Returns\",\"datePublished\":\"2023-07-05T00:55:13+00:00\",\"dateModified\":\"2023-07-05T00:55:15+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=31423\"},\"wordCount\":607,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/ifintechworld.com\/#organization\"},\"keywords\":[\"Featured\"],\"articleSection\":[\"News\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/ifintechworld.com\/?p=31423#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/ifintechworld.com\/?p=31423\",\"url\":\"https:\/\/ifintechworld.com\/?p=31423\",\"name\":\"End Of Easy Money: Unicorn Bubble Implodes, Normalcy Returns | iFintechWorld\",\"isPartOf\":{\"@id\":\"https:\/\/ifintechworld.com\/#website\"},\"datePublished\":\"2023-07-05T00:55:13+00:00\",\"dateModified\":\"2023-07-05T00:55:15+00:00\",\"description\":\"AI hype & hoopla replaces crypto, blockchain, and FinTech hype & hoopla. You\u2019ve got to go with the times. In the second quarter 2023, only 12\",\"breadcrumb\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=31423#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/ifintechworld.com\/?p=31423\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/ifintechworld.com\/?p=31423#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/ifintechworld.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"End Of Easy Money: Unicorn Bubble Implodes, Normalcy Returns\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/ifintechworld.com\/#website\",\"url\":\"https:\/\/ifintechworld.com\/\",\"name\":\"Repay Down\",\"description\":\"Latest Personal Finance News, Tips and Updates\",\"publisher\":{\"@id\":\"https:\/\/ifintechworld.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/ifintechworld.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/ifintechworld.com\/#organization\",\"name\":\"Repay Down\",\"url\":\"https:\/\/ifintechworld.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png\",\"contentUrl\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png\",\"width\":558,\"height\":90,\"caption\":\"Repay Down\"},\"image\":{\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61\",\"name\":\"News Room\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png\",\"contentUrl\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png\",\"caption\":\"News Room\"},\"sameAs\":[\"https:\/\/ifintechworld.com\"],\"url\":\"https:\/\/ifintechworld.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"End Of Easy Money: Unicorn Bubble Implodes, Normalcy Returns | iFintechWorld","description":"AI hype & hoopla replaces crypto, blockchain, and FinTech hype & hoopla. You\u2019ve got to go with the times. In the second quarter 2023, only 12","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/ifintechworld.com\/?p=31423","og_locale":"en_US","og_type":"article","og_title":"End Of Easy Money: Unicorn Bubble Implodes, Normalcy Returns | iFintechWorld","og_description":"AI hype & hoopla replaces crypto, blockchain, and FinTech hype & hoopla. You\u2019ve got to go with the times. In the second quarter 2023, only 12","og_url":"https:\/\/ifintechworld.com\/?p=31423","og_site_name":"iFintechWorld","article_published_time":"2023-07-05T00:55:13+00:00","article_modified_time":"2023-07-05T00:55:15+00:00","og_image":[{"width":1536,"height":1024,"url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/07\/1688518513_image_1371055972.jpg","type":"image\/jpeg"}],"author":"News Room","twitter_card":"summary_large_image","twitter_misc":{"Written by":"News Room","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/ifintechworld.com\/?p=31423#article","isPartOf":{"@id":"https:\/\/ifintechworld.com\/?p=31423"},"author":{"name":"News Room","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61"},"headline":"End Of Easy Money: Unicorn Bubble Implodes, Normalcy Returns","datePublished":"2023-07-05T00:55:13+00:00","dateModified":"2023-07-05T00:55:15+00:00","mainEntityOfPage":{"@id":"https:\/\/ifintechworld.com\/?p=31423"},"wordCount":607,"commentCount":0,"publisher":{"@id":"https:\/\/ifintechworld.com\/#organization"},"keywords":["Featured"],"articleSection":["News"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/ifintechworld.com\/?p=31423#respond"]}]},{"@type":"WebPage","@id":"https:\/\/ifintechworld.com\/?p=31423","url":"https:\/\/ifintechworld.com\/?p=31423","name":"End Of Easy Money: Unicorn Bubble Implodes, Normalcy Returns | iFintechWorld","isPartOf":{"@id":"https:\/\/ifintechworld.com\/#website"},"datePublished":"2023-07-05T00:55:13+00:00","dateModified":"2023-07-05T00:55:15+00:00","description":"AI hype & hoopla replaces crypto, blockchain, and FinTech hype & hoopla. You\u2019ve got to go with the times. In the second quarter 2023, only 12","breadcrumb":{"@id":"https:\/\/ifintechworld.com\/?p=31423#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/ifintechworld.com\/?p=31423"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/ifintechworld.com\/?p=31423#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/ifintechworld.com\/"},{"@type":"ListItem","position":2,"name":"End Of Easy Money: Unicorn Bubble Implodes, Normalcy Returns"}]},{"@type":"WebSite","@id":"https:\/\/ifintechworld.com\/#website","url":"https:\/\/ifintechworld.com\/","name":"Repay Down","description":"Latest Personal Finance News, Tips and Updates","publisher":{"@id":"https:\/\/ifintechworld.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/ifintechworld.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/ifintechworld.com\/#organization","name":"Repay Down","url":"https:\/\/ifintechworld.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/","url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png","contentUrl":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png","width":558,"height":90,"caption":"Repay Down"},"image":{"@id":"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61","name":"News Room","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/image\/","url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png","contentUrl":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png","caption":"News Room"},"sameAs":["https:\/\/ifintechworld.com"],"url":"https:\/\/ifintechworld.com\/?author=1"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/31423","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=31423"}],"version-history":[{"count":1,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/31423\/revisions"}],"predecessor-version":[{"id":31425,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/31423\/revisions\/31425"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/media\/31424"}],"wp:attachment":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=31423"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=31423"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=31423"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}