Venture partners are trying to encourage tech startups to freshen up to adjust to the current economic slowdown, the Wall Street Journal (WSJ) wrote on Tuesday (September 20).
He says he’s seen startups innovating even in the midst of a bad economy, as there are claims that fear underinvesting in technology could hurt their market shares.
Shane Wall, venture partner and president of CXO Networks at the Fusion Fund, said that markets “have won or lost depending on what you do in a downturn” and that tech majors can ensure companies prioritize progress so that they don’t fall behind
Wall said the economy is likely to “weaken” next year and will likely have “winners and losers.” But he said there is potential for massive growth opportunities.
And there’s still a huge opportunity for cloud spending, along with cybersecurity and automation, said Alex Kayal, senior vice president and managing partner at Salesforce Ventures.
Kayal said entrepreneurs have become “even hungrier” given the current economic conditions and want to solve the problems facing businesses. One example cited in the WSJ report is Snitch, which has raised funds from Salesforce Ventures and others over the past year and is attempting to bring the security mentality to the developer stage with code with cybersecurity in mind.
PYMNTS recently wrote that startup venture debt is rising as investors become increasingly concerned about the current environment.
READ ALSO: Startup Venture Leverage Rises As Investors Become More Cautious
This comes after a long decade of fast-moving startup cash that is now turning into more debt.
As the good times rolled on, startups didn’t need debt — but investors are now looking for higher returns on investments to offset risk amid volatile markets, interest rates, and inflation. Global risk finance in February was $10 billion below January as the economy turned around, the war in Ukraine and various economic factors began to play their part.
New PYMNTS study: How consumers are using digital banks
A PYMNTS survey of 2,124 US consumers shows that while two-thirds of consumers use fintech for some aspect of banking services, only 9.3% cite it as their primary bank.
Sign up for our daily newsletter.
You have successfully entered our customer list.
We’re always looking for opportunities to partner with innovators and disruptors.
learn more
source
