Investors expect tech start-ups to perform well after WeWork’s failed IPO
At the Web Summit tech conference which took place in Lisbon, Portugal this week, more than 2,000 start-ups attended in order to gain attention. Potential investors raised the question as to how the companies are going to make money and thrive in the industry.
“The narrative on the distance to profitability and the path to profitability becomes a bigger part of the story versus growth at all costs, and you’re seeing that return,” stated the founder and managing partner of venture capital firm NewView Capital, Ravi Viswanathan, in a panel Thursday titled “Is Silicon Valley Pivoting to Profits?”
Investors are focusing on whether companies are making profits or not following an array of high-profile IPOs from companies like Uber, Lyft and Peloton that went through losses. WeWork had to cancel its IPO as investors ended losing hope after the company had an unfavorable time with massive losses. On the other hand, Uber shares fell this week after the company reported a $1.1 billion net loss in its third-quarter earnings report this week.
“A red flag is when your losses are growing quicker than
your top line,” said Tim Levene, partner and CEO of U.K. publicly listed
fintech venture capital firm Augmentum.