At least nine tech companies that went public in the past three years—including Compass, Lyft, Oscar Health and The RealReal—are now worth less than the total amount of money they raised before going public. Let that sink in.
The best example of that may be insurance tech firm Root. Venture capitalists including Tiger Global Management and Ribbit Capital sank roughly $674 million into the company before it went public in 2020, when it raised an additional $1.1 billion through an initial public offering and simultaneous private placement. Yet Root’s market capitalization as of Tuesday morning was a little over $100 million.