By Erin Griffith
Now the layoffs have started coming in droves. Last month, the robot pizza start-up Zume and the car-sharing company Getaround slashed more than 500 jobs. Then the DNA testing company 23andMe, the logistics start-up Flexport, the Firefox maker Mozilla and the question-and-answer website Quora did their own cuts.
“It feels like a reckoning is here,” said Josh Wolfe, a venture capitalist at Lux Capital in New York.
It’s a humbling shift for an industry that long saw itself as an engine of job creation and innovation, producing the ride-hailing giant Uber, the hospitality company Airbnb and other now well-known brands that often disrupted entrenched industries.
Now a pullback is unfolding in precisely the areas that drew the most hype.
Around the world, more than 30
There are now “frantic mini-moments of panic, as one thing after another happens,” said Roy Bahat, an investor at Bloomberg’s venture arm in San Francisco. “At some point, one rock after another will fall away from the cliff and we’ll realize we’re not standing on anything in many, many companies.”
“You can’t build on top of something that’s not strong,” said Seth Besmertnik, chief executive of Conductor, a marketing business that
This month, SoftBank reported that its Vision Fund and other investments led to a $2 billion operating loss in the last quarter of 2019. In a statement, it said some of its
The pullback will probably not be as severe as the dot-com bust in the early 2000s, when dozens of unprofitable internet firms failed. Today, venture capitalists and other investors still have large pools of money to invest. And certain types of
“Firms that were spending money in
More workers are questioning the promises from
“People are becoming more critical and skeptical before just joining the party,” said Ms.
A bounce back does not appear likely soon. When Casper — which raised more than $300 million in venture capital — went public this month, its stock promptly plummeted. That served as a warning to other high-profile
Then in mid-2019, investors started doubting whether the industry could deliver on its lofty promises when some publicly traded cannabis companies were tarred by illegal growing scandals and regulatory crackdowns.
“A lot of companies are not going to make it through this year,” said Brendan Kenney, chief executive of Tilray, a cannabis producer that went public in 2018. Mr. Kenney said he was stopping spending on new projects to survive the shakeout.
In December, Unicorn said it could not afford to deliver any scooters and shut down. Mr. Evans ended up giving some