Investments fall, but startup industry grows

Autor: Pipeline Capital
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Text by Pyr Marcondes, Senior Partner at Pipeline Capital Tech.

I’ll start by quoting myself, in an article I wrote for the Pipeline Capital Blog, published on my birthday, April 18 (link below, if you’re curious to read the original): “… Also, there is also the segment of startups and scale ups, which are the base of the pyramid of this industry, and which, many times, seem to happen in the midst of crises and scares in the economies. It remains attractive and extremely transformative right now. With war or without war. …”

I will now continue quoting an article by my partner Alon Sochaczewski, whose title is “It’s a bad mood and it will pass”, in which he talks about the M&A segment: “M&A is “the solution” with or without a crisis, of inorganic growth of companies. What we will have is an increase in mergers, however, the volume of investment will remain high. We have a lot of Private and Venture Capital capitalized. It is a market that moves towards transformation and that, again, will not stop because of the crisis”. (Link to original article also below.)

Closing the quotations, Exame has just published an article on a similar topic, whose title explains everything that the text reveals: “Falls in prices make big companies appetite for startups”. (Also, link below.)

If you’re good at puzzles, you’ve already put the pieces together. If you’re still in doubt about what the point is here, I’ll explain.

The entire financial market moves in cycles and swings. Cycles account for the comings and goings of macroeconomic cycles. Pendular movements are those that adjust the market to the current economic dynamics.

If investments at this time of macroeconomic uncertainty tend to shrink due to the natural and predictable caution of investors, on the other hand, there are opportunities spread across all sides of the chain, particularly at the base, at this time: startups and scale ups, as I said in my birthday.

There was, indeed, an atmosphere of euphoria in the valuations of these quasi-companies (startups are still not exactly companies) and, in the last 10 years, their value has reached peaks that are often meaningless. But the market continued, pendularly, adapting to this condition. Unicorns were valued on the stock exchange in an apparently extra-reality way and now many of them are undergoing a review of their share prices. Down.

Startups and scale ups will continue to be valuable, because they will continue to be vital for the development of economies, which simply cannot stop.

We will see, as Alon says, more mergers from now on. And we will see, as quoted by Exame and I, companies remaining interested in the initiatives of entrepreneurs that have disruptive value and that can accelerate the machines of larger companies, which incidentally, just to remind you, without this fuel, simply stop innovating and growing.

No company is willing to pay the high price of obsolescence.

Link to Pyr’s article.

Link to Alon’s article

Link to Exam Report

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Pipeline Capital

Pipeline Capital Tech Investment Group is a tech-driven advisory and investment platform that integrates intelligence, excellence, international presence, and profitable ventures for founders and investors. Established in 2012, Pipeline draws its name from a famous Hawaiian beach, as its founder is an avid surfer, symbolizing how the business world comes in waves, the opportunities rise and fade swiftly. In the business landscape, it’s crucial to be prepared to spot, anticipate, and capitalize on these waves of opportunity, so our mission is to support companies in catching the best waves and riding them with excellence to secure the best deals. We are not a traditional M&A and investment firm. Instead, we were founded and are managed by entrepreneurs who are also partners of the company. With years of expertise in Tech, Advertising, Marketing, and Finance, we possess deep knowledge of the tech sector and extensive global experience. As a Capital Tech Driven Company, we believe the best business opportunities lie in the intersection of investments and technology.

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