For months now, the scorching tech industry has shown signs of feeling a slight breeze. As early as September, for example, Nicole Perlroth reported that some security start-ups, used to easily raising new money, were being asked something almost novel: Where are the profits?
More signs emerged yesterday. HotelTonight, the hotel booking site, said that it had laid off about 20 percent of its workers, or 37 people. But that development was overshadowed by news that Fidelity Investments, the mutual fund giant, had marked down the value of Snapchat, the messaging start-up, by 25 percent. This year, the giant asset manager BlackRock devalued Dropbox, a widely used file storage service.
As Michael J. de la Merced and Katie Benner write, the moves by such large investment companies reflect how those companies can create challenges for technologyâs hot start-ups, just as they helped inflate their valuations in the first place. In recent years, many of those large investment companies started putting more money into mutual funds that invested in private start-ups.
The recent news could be fleeting, of course. The biggest players â Amazon, Apple, Facebook, Google and Microsoft â all recently reported strong earnings. And Uber, the highest-valued private start-up of all, does not appear to be slowing down one bit. But the industry’s path is definitely starting to look a little more like a roller coaster ride than the flight of a rocket ship.