WeWork collapse a welcome step towards sanity in venture space

The tech and startup ecosystem needs a sanity check. The fall from grace of WeWork's parent company is unlikely to catalyse a full reckoning in that market, but it does bring it a step closer towards rationality.

The prevailing wisdom is that the tech and startup market is now under pressure after public-market investors resoundingly rejected the initial public offering attempt of The We Co, which owns co-working space provider WeWork.

There is some truth to that. The We Co was valued at billions of dollars before it filed its listing prospectus, but is now struggling to stay afloat after investors had a chance to take a good look at its business and accounts. Taken together with the lacklustre performance of other tech unicorns such as Uber, Lyft, Peloton Interactive and Slack Technologies - all are underwater versus their initial listing prices - the logical takeaway is that investors in the public markets are unwilling to accept promises that are not backed by sound fundamentals. Exits via listings may not be so simple to pull off after all.