Key economic indicators are flashing warning signs about a possible recession on the horizon both here in the U.S. and worldwide, and the macroeconomic slowdown is squeezing multiple facets of the market and economy.
2021 was by no means a typical year. Following the COVID-19 pandemic recession, economic activity snapped back fast and hard. Interest rates were at historic lows, which made borrowing money basically free. It was the perfect backdrop for high-growth companies and the investors of those companies. Though overall investments may be shrinking for the time being, the technology, media and telecom sector remained the top VC target. So far this year, investments in TMT companies accounted for 45% of total VC investments, outpacing the sector’s share looking back to 2019, according to S&P Global Market Intelligence.
Times have changed, and both the tech and media sectors are in a transitionary phase. Many companies are focusing on profitability and cost efficiencies instead of the prior “growth-at-all-costs" mentality. And this could be another reason TMT looks more attractive to VCs and private equity firms these days. Not to mention, if history is any indication, the entertainment industry is rather resilient in recessionary times.
what the fckng is that