Markdowns & shrinking market caps

Good afternoon,

The last eighteen months have been difficult for startups all around the world. The venture slowdown has had an effect on the majority of startups across different sectors and geographies, with funding drying up. As a result, many have had to switch to survival mode, scaling back operations, implementing job cuts, and in many cases, shutting shops.

In addition to scaling back operations and implementing job cuts, many startups have also been forced to reduce subsidies, cut back on excessive spending in their pursuit of rapid growth, and find “real” product-market fit (if I may call it that).

All of this has also resulted in investors marking down their private investments in startups, downrounds, and big falls in the market caps of publicly traded companies. And this too has happened with startups and companies, all around the world - including MENA.

I have put together this quick chart of companies from the region that have seen their valuations drop as a result of a markdown by an investor, a downround, or falling stock prices. The chart compares their end-of-year valuations for 2021 and 2022.

So, it doesn’t really convey the latest trends but provides a general overview of recent developments and gives you a sense of what has been happening.

The second chart highlights trends for global companies operating in similar sectors. Make of it what you will, but it is not meant to be a direct comparison.