Corporate investors fill startup funding gap as VC firms pull back

According to investors, corporations are increasing investing for enterprise-technology firms despite a general slowdown in venture capital agreements.

The rebound comes as huge institutional investors such as hedge funds and pension funds abandon riskier bets on emerging technology businesses. Traditional venture capital firms are likewise reducing their investment in startups.

“But we’re seeing large corporations continue to invest,” Christophe Bourque, general partner at investment firm White Star Capital, said Tuesday at a panel at Collision 2022, a startup and investing conference in Toronto. “We’ve seen a lot of this across our portfolio companies.”

The Nasdaq Composite Index, which is centered on technology, fell to its lowest close since September 2020 last week, though it recovered 2.5 percent on Tuesday. Similar declines are reverberating throughout the startup sector, as many digital companies have shifted from hypergrowth to survival mode, eliminating employment and revenue projections.

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