American venture capitalist Doug Leone doesn’t think the tech wreck is going away anytime soon.
The Sequoia Capital partner gave a gloomy outlook for the global economy, warning that today’s downturn was worse than recessions in 2000 and 2008.
“The situation today I think is more difficult and more challenging than either ’08, which was really a protected financial services crisis, or 2000, which was a protected technology crisis,” Leone said, speaking onstage at the Slush startup conference in Helsinki.
“Here, we have a global crisis. We have interest rates around the world increasing, consumers globally are starting to run out of money, we have an energy crisis, and then we have all the issues of geopolitical challenges.”
Tech leaders and investors have been forced to reckon with higher interest rates and deteriorating macroeconomic conditions.
With central banks raising rates and reversing pandemic-era monetary easing, high-growth tech stocks have been on the decline.
The Nasdaq Composite is down nearly 30% year-to-date, facing a sharper decline than that of the Dow Jones Industrial Average or S&P 500.
That’s had a knock-on effect on privately-held companies, with the likes of Stripe and Klarna seeing their valuations drop.
As a result, startup founders are warning their peers that it’s time to rein in costs and focus on fundamentals.