VCs Lavished Startups With Cash in 2021. Now Comes the Hard Part

In June 2021, Ralf Wenzel founded the grocery delivery startup JOKR to meet the demand of millions of people who had discovered the convenience of online shopping for food. One month later, the startup had raised $170 million to build “a new Amazon,” starting with grocery delivery in nine cities. By December, JOKR had raised another $260 million, at a $1.2 billion valuation. Technology startups are supposed to move fast, but this was a new kind of velocity: JOKR went from being a twinkle in its founder’s eye to a hot-shot unicorn in just six months.

So it goes with hot startups in 2021. Investments that seemed enormous—even record-breaking—last year have been dwarfed by the deals of 2021. Venture capital funding is at an all-time high, with $628 billion spent globally on startups in 2021, according to data from Pitchbook. That’s nearly double last year’s total, which set the previous record. This capital overflow has led to eye-popping valuations, fierce competition for deals, and a frenzy among investors who want in on the world’s next great companies.

Are startups really more valuable in 2021, or are we in the peak of a unicorn bubble? “I do think we’re in an entrepreneurship boom,” says Micah Rosenbloom, a partner at Founder Collective. He says that people who worked at rocketship startups, like Airbnb or Uber, are now starting their own companies, bringing with them a startup savvy that earlier founders didn’t have. There’s also plenty of…

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