Startup valuations are falling, but not consistently

While this year the fall in the stock market was rapid, but also widespread, with very few companies escaping the downturn. But current market conditions have not led to the same unified trajectory for startups.

When stock prices in the public market started to fall, everyone reminded themselves that it would take a few months to see the real impact in the private market – historically a six-month delay. But data from Hood lighta fintech looking to make secondary trading more transparent found that late-stage startups didn’t really follow a unique trend.

The sample set of startups that Caplight researched includes the 10 highest-rated venture-backed companies, including recognizable names like Canva, ByteDance, and Stripe. We focus on the changes in the share prices against which these companies have traded in the secondary market. Those prices, in turn, are derived from a company’s valuation during secondary transactions.

The data showed that valuations of some of these startups fell late-stage in line with the public market, while some started falling in 2021, before public markets entered the water, and others are still see their appreciation rise. While we don’t know exactly why, when and how hard each company’s valuation is hit – if at all – there are a few observations worth noting.