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| A panorama of the opening ceremony of Web Summit, Europe's largest technology conference, held in Lisbon, Portugal on November 1, 2021. |
Tech bubbles are bursting everywhere. Web Summit, the sector's annual bash in Lisbon, does just the opposite. The number of newly mask-free attendees to the event co-founded in Dublin by Paddy Cosgrave a decade ago has returned to pre-pandemic levels of over 70,000, compared with about 40,000 last year.
Some things stay the same. Web Summit attendees are still hooked as they watch Boston Dynamics' robot dog and quaff wine served in a part of the Altis Arena from noon. And the usual welters of tech companies, investors, and celebrities are still hanging around. Binance's Changpeng Zhao, Ark Invest's Cathie Wood, Uber Technologies' (UBER.N) whistleblower Mark McGann and Formula 1 legend Toto Wolff were all going head to head. So did Ukrainian First Lady Olena Zelenska and Deputy Prime Minister Mikhail Fedorov.Ukrainian Government.
That said, the reality of the great implosion of technology in 2022 wasn't all that great in Lisbon. A shaved-headed Zhao said on stage that cryptocurrencies are perhaps the only stable thing in a volatile and uncertain economic environment. The Binance boss, who invested $500 million in Elon Musk's acquisition of Twitter, was probably referring to crypto technology, not the price of digital assets. Bitcoin has fallen 60% this year.
Some were keen to show they weren't panicking. Just 8% of venture capitalists surveyed by PitchBook at the conference said they planned to cut back on investments significantly due to rising inflation. The recent big drop in big tech stocks didn't seem high on the list of concerns for investors and startups either. On the contrary, some see Mark Zuckerberg's Meta Platforms (META.O) as a potential winner, which has lost more than $700 billion in market value since last September, while still working hard to build the so-called Metaverse. . "What if he's right?" Anand Iyer of Lightspeed Venture Partners told Breakingivews.
Some were keen to show they weren't panicking. Just 8% of venture capitalists surveyed by PitchBook at the conference said they planned to cut investments significantly due to rising inflation. The recent big drop in tech stocks didn't seem high on the list of concerns for investors and startups alike. On the contrary, some see Mark Zuckerberg's Meta Platforms (META.O) as a potential winner. It has lost more than $700 billion in market value since September last year while working hard to build the so-called Metaverse. "What if he's right?" Anand Iyer of Lightspeed Venture Partners told Breakingivews.
Still, there are concrete signs that some things have changed. After two years of virtual investments in cash-burning startups, the investor told Breakingviews that he feels it's riskier to invest in outfits of people who aren't spending their time. Fundraising, according to KPMG Activity reached a two-year low at the end of September. Privately held fintech company Stripe, which slashed its valuation to $74 billion over the summer, announced layoffs on Thursday and admitted to spending heavily over the past two years. It's not the last.
However, this new strain of reality-based technology investment has a long way to go. The relative lack of investor interest at Web Summit in new technologies that could turn the dial, such as ways to mitigate climate change, is striking. The number of panels still obsessed with the metaverse, blockchain, and cryptocurrencies is much higher than those focused on things like climate technology. It may be that many cryptocurrency advocates have flocked to Portugal in the past year because they do not tax profits made from the currency.
Brad Smith, president of Microsoft (MSFT.O), believes the climate-related tech sector is gaining momentum. Smith told Breakingviews that the area will increasingly "influence what people talk about and who comes to Web Summit." The smartest venture capitalists at this year's shindig are taking notice, and while valuations are still cheap, they're already investing.
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