This text initially appeared on Enterprise Insider.
Startups are having a fairly grim yr.
Simply over $27 billion in enterprise funding was raised by the three,200 startups that failed in 2023, The New York Instances reported, citing figures from startup tracker PitchBook.
That is near the quantity raised by startups from enterprise capital within the third quarter of 2023 ($29.8 billion), in accordance with accounting agency EY.
Nevertheless, the $27.2 billion determine possible underrepresents the true scale of the money burn, as many firms may have failed with none fanfare. And notably, the tally does not embody main losses from public firms or people who had been acquired.
For example, coworking firm WeWork raised greater than $11 billion earlier than its IPO, and filed for chapter in November. And school monetary help startup Frank was acquired by JPMorgan in 2021 for $175 million, earlier than being shuttered in January over fraudulent buyer figures.
This yr’s seen a string of high-profile startup failures. Pizza startup Zume, which raised almost $500 million, shut down in June after struggling to make its pizza automation expertise work.
Convoy, the freight startup that was as soon as hailed because the “Uber for trucking” and raised greater than $1 billion, shut down in November.
This yr’s startup troubles led Tom Loverro, a common companion at funding agency IVP, to name it a “mass extinction occasion” for startups.
These troubles stem partly from the decline in funding. There’s been a drought in VC funding in contrast with 2022, with $104.5 billion raised within the first 9 months of the yr versus $183.9 billion in the identical interval final yr, per EY.