Venture capitalists and tech entrepreneurs are cautious about the worsening global macroeconomic picture as the technology industry undergoes a correction phase with falling company valuations and wide-scale cutbacks.

“There’s a lot of uncertainty,” Miki Kuusi, the CEO of Finnish delivery platform Wolt told fDi at Slush 2022. Mr Kuusi is also the co-founder of Slush, one of Europe’s largest tech events, the latest iteration of which took place in Helsinki, Finland, November 17–18. “I think more or less every company has to accept the fact that we don’t know what’s going to happen next year.”


There’s a lot of uncertainty; I think more or less every company has to accept the fact that we don't know what's going to happen next year

 Miki Kuusi, CEO, Wolt 

During the third quarter of 2022, venture capital (VC) funding in Europe stood at €18.4bn, down by 36.1% on the same period of last year and the lowest figure since the fourth quarter of 2020, according to PitchBook data. 

“We have to be ready for a prolonged time where we’re going to find consumers running out of money,” said Doug Leone, the global managing partner at Silicon Valley-based VC firm Sequoia Capital, during a session at Slush on November 17.

Mr Leone said the current global crisis is “more challenging” than the financial crisis of 2008 and the dotcom bubble of 2000, given demand decreasing, cutbacks in tech company budgets and fewer companies being founded.

“Survival in this market is half the battle,” he said.


Several public US tech companies have announced massive layoffs this month, including the highly public Twitter fallout, Facebook’s parent company Meta, e-commerce giant Amazon and cloud provider Cisco. Since the start of October 2022, about 55,000 layoffs have been tracked across the tech industry, bringing the total for the year to more than 134,000, according to data from In most cases these layoffs are an unwinding of recent massive hiring campaigns, but prominent figures underline that they are a sign that the tech industry's pandemic fuelled boom time is coming to an end.

Nikolay Storonsky, the co-founder and CEO of digital bank Revolut told fDi at Slush that during the past five years “capital was misallocated” to a lot of start-ups with unsustainable business models.

“Now we’re back into this swinging mood of efficient capital allocation. As a result, a lot of start-ups will go out of business or will be forced to raise at much lower valuations,” he said. Mr Storonsky recently launched Quantum Light Capital Fund, a fund focused on artificial intelligence which he says will be different to the “crowd-thinking mentality” seen in the VC industry.

Several prominent venture capitalists underlined the issue facing founders trying to fundraise as interest rates have increased. "Today in this environment, everything that needs a lot of money is a hard sector to invest in, because money is more expensive," said Mar Hershenson, the managing partner at PearVC. This has fed through into valuations of companies in the tech sector, which had skyrocketed in recent years as billions of dollars has been poured into VC funds by institutional investors and deployed into start-ups.

Some founders are “facing really tough decisions, cuts, layoffs, ‘down-rounds’ (when a start-up raises financing at a lower valuation to their previous round) and even closing down”, said Niklas Zennström, the co-founder of Skype and CEO of Atomico, one of Europe’s leading VC firms.

“Down-rounds are just a function of the broader market. It’s the reality we are facing right now. People aren’t willing to pay the same amount for a technology company as they were a year ago,” said Mr Zennström, noting that almost 19% of European VC rounds in the third quarter of 2022 fit this definition.

He continued that the pre-money valuations of start-ups in the fourth quarter of 2022 so far “have fallen as much as 62%” from the heights at the beginning of the year, adding that “there is no sign of this changing anytime soon”.

This environment is a step change to recent years. Global VC investment in 2021 topped $687bn, up from $353.3bn the previous year, marking a growth rate of almost 95%, according to PitchBook. This spectacular rise of VC funding had fuelled many companies to pursue growth through international expansion. Now, as the ‘era of free money’ is over, big-name scale-ups in Europe and elsewhere have had to reassess their plans and focus on profitability.