Facebook Co-Founder's VC Firm Sees Funding Drought Until 2024 | Tech News

Facebook Co-Founder's VC Firm Sees Funding Drought Until 2024

Investment firm run by Facebook co-founder Eduardo Saverin, expects startups to suffer from a fundraising drought.

By:BLOOMBERG
| Updated on: Sep 30 2022, 17:23 IST
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B Capital Group, the investment firm run by Facebook co-founder Eduardo Saverin, sees funding drought until 2024. (REUTERS)

B Capital Group, the investment firm run by Facebook co-founder Eduardo Saverin, expects startups to suffer from a fundraising drought until 2024 as turbulence in the financial markets persists.

Entrepreneurs will “have to make their capital last 18 months,” Raj Ganguly, B Capital's co-founder and managing partner, said in an interview with Bloomberg Television's Haslinda Amin and Shery Ahn in Singapore on Friday. “We see this period of volatility continuing through the end of 2023 and companies have to survive with the capital that they have.”

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Soaring inflation and rising interest rates have weighed on tech stocks globally, forcing companies to postpone funding rounds and initial public offerings. Grab Holdings Ltd., long considered one of the rising stars of Southeast Asia, has lost more than 70% since it went public in the US in December as investors soured on unprofitable tech ventures. Even Sea Ltd., the region's most valuable tech firm, warned this month it won't be able to raise funds in the market.

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Southeast Asia's rising crop of tech companies are lobbying investors with scenarios of profitability, as mounting losses and rising interest rates compel VCs to become more choosy.

“We've gone from an era of talking about growth at all costs, to really talking about optimization and efficiency,” Ganguly said.

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First Published Date: 30 Sep, 17:23 IST
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