The growth of startups around the world is slowing down. According to US research firm CB Insights, the number of companies that became unicorns in
January-March was 13, down 90% from the same period last year. It was the lowest number in six years on a quarterly basis. The slowdown of startups could lead to a delay in the
turnover of industries and economies.
Startups have benefited from global monetary easing in recent years. The number of unicorns increased by 65% in one year to 1,095 as of March 2022.
However, in the past year, interest rate hikes and economic slowdowns in the US and Europe have been headwinds, and as of March 2023, it remained at a 10% increase to 1,206.
Looking at the industries of the 13 companies that became unicorns in January-March, artificial intelligence (AI) related companies accounted for the
most with four. By region, the US had the most with eight, but it fell to one-tenth of the same period last year (79).
The main cause of the sharp decline is the decrease in investment money. The amount of funds raised by startups in January-March was $58.6 billion
(about 7.8 trillion yen), down 60% from the same period last year. The number of “mega-rounds” with a funding amount of more than $100 million dropped by nearly 80% to 90. Companies
that raised funds at high valuations are overvalued compared to their actual performance, making it difficult to raise additional funds.
The bankruptcy of Silicon Valley Bank (SVB) in March also casts a shadow. SVB was a bank that lent money to startups, but it went bankrupt after
accounting fraud was discovered. Companies that relied on SVB’s loans are struggling with cash flow and may face a brake on growth.