When the coronavirus pandemic first hit in March, many technology start-ups braced themselves for The End, as business dried up, venture capitalists warned of dark times ahead and restructuring experts predicted the beginning of a “great unwinding” after a decade-long boom.
Five months later, those doomsday warnings have not translated into the drastic shakeout that many had expected.
Funding for young companies has stayed robust, particularly for the larger start-ups. Some of them, like the stock trading app Robinhood and Discord, the social media site, have pulled in hundreds of millions of dollars in new capital in recent months, boosting their valuations. And initial public offerings of tech companies have come roaring back, alongside a surging stock market.
“Things generally are substantially better than our worst fears 90 days ago,” said Rich Wong, an investor at Accel, a Silicon Valley venture capital firm.
Still, it’s been a hectic period for some firms. Getaround, a car sharing start-up, started the year by laying off 150 employees and scaling back some operations. Two months later, with the spread of the coronavirus, business got even worse, with further layoffs.
But in May, business bounced back when people began using the start-up’s cars to get on the road again. Getaround’s revenue in the United States for the year is now 40 percent above where it was a year ago. Last month, it brought back all of its furloughed employees and started hiring again.
“We have seen a very, very fast recovery,” said Sam Zaid, Getaround’s chief executive, adding that he was now raising more cash. “It’s been a bit of a wild ride.”