Just after witnessing a funding winter, AI companies are raising funds at large valuations due to AI hype at the moment which bring backs the memory 2021 which is considered to be year of Unicorns for India.
In 2021 many big companies raised funding rounds at much larger valuation as they have right now including browserstack, groww.
That valuation bubble has arrived post GPT.
Why valuation was hyped in 2021?
1. COVID-19 Accelerated Trends
Possibly due to increased use case of tech after covid causes people to work remotely was the biggest reason for tech startups to see boost in funding at bigger valuation resulting from Tech Valuation Hype to Tech Bubble.
2. Low Interest Rates :
Think of interest rates like the price you pay to borrow money. During this time, interest rates were low, like a sale at your favorite store. When borrowing is cheap, companies can expand and grow without spending a fortune on interest, making them more appealing to investors.
In a nutshell, the high valuation of companies/startups in 2021 were fueled by excitement for new companies, a changing world, low borrowing costs, the fear of missing out, and the thrill of technology advancements.
It was like a perfect storm that made these parties the talk of the town!
