How start-ups can avoid a drop in their valuation

Klarna’s story has given many entrepreneurs a cold sweat. In one year, this Swedish fintech has lost more than 85% of its value (6.7 billion dollars) on the occasion of a new fundraiser. More recently, it’s Cityscoot that has seen its valuation dwindle.

In the United States alone, 81 companies have lowered their valuations, according to data from PitchBook. The fall is brutal. “Some growing American start-ups have a valuation based on three times the ARR [revenu récurrent annuel]. We are at a fairly historic low. Tech isn’t used to that at all. The range has long been a multiple of at least 10 or 20, or even 70 out of 100 for the best companies”, analyzes Frédéric Plais, the founder of Platform.sh, which raised 133 million euros in the spring.