Tech's 'zombie unicorns' reach the end of the road

PRESIDENT DONALD TRUMP'S tariff tantrum has so far delivered only bad news for tech—as it has for just about everyone except Make America Great Again diehards.

- Parmy Olson Bloomberg

Fintech firm Klarna Group Plc and ticketing platform StubHub have paused their initial public offering (IPO) plans, threatening to starve venture firms of the cash they need to satisfy investors. That suggests the last two years of declines in startup funding have further to drop. But there are silver linings for tech founders and their backers. The tariff shock could offer a healthy correction to an ecosystem that has long struggled to focus on financial fundamentals.

Even before the last two years of AI hype that fueled bubbly tech valuations, Silicon Valley had a zombie unicorn problem: Many startups that attained unicorn status by getting a valuation of $1 billion or more had dwindling prospects and little hope of justifying their status. In 2021, for instance, more than 354 startups reached the billion-dollar threshold, but only six have since held IPOs, according to a recent Bloomberg News report.