A “foam squeeze” campaign is being launched in full swing.

A while ago, I heard that a consumer track company got a lot of financing. Originally, this may represent a good signal. But the result really can’t stand prying - the transaction valuation of the company’s current round of financing is 40% lower than the price previously shouted. Moreover, it was revealed that the company’s financing situation this time has also become scarce, “there are basically not many institutional competitors”. After the feast, it was full of loneliness. When asked whether the self decreasing valuation has become the financing norm of consumer projects, an investor said bluntly, “it’s good to be able to finance. In some cases, the valuation is halved and there is no capital to talk about.” The decline in the valuation of the consumer track is only one corner. The sharp cooling of the secondary market in 2022 has made investors in many fields cautious and calm. “The valuation of some targets in the market has indeed fallen. When investing, institutions are more concerned about how to get the quota than before, and now they are more concerned about ‘why the valuation is so high’.” The “unicorns” have fallen into collective anxiety. Looking at the whole venture capital market, there are not a few companies that take the initiative to reduce their valuation. Just one month ago, in March 2022, the offline chain coffee brand tims China announced that it had obtained a total financing of US $194.5 million (about RMB 1.238 billion). At the same time, TIMS China also mentioned some important changes in its merger transaction plan with special purpose acquisition company Silver crest. Previously, TIMS China and silver crest signed a merger agreement, which will make tims China a NASDAQ listed company. According to the terms of the revised merger agreement, TIMS China’s pre merger valuation was adjusted from US $1.688 billion to US $1.4 billion, a direct decrease of US $288 million (about 1.833 billion yuan). Subsequently, instacart, an American fresh grocery distribution platform, also publicly said that it had reduced the company’s valuation by nearly 40%, from $39 billion to about $24 billion. In March 2021, instacart completed a financing of US $265 million, and the post financing valuation reached US $39 billion. This round of financing also made instacart win the title of “the fourth largest unicorn” in the United States. On the reasons for the valuation reduction, instacart said in a statement: “we have full confidence in the company’s business strength, but we have not been spared from the current market turmoil. It has seriously affected technology companies, whether listed companies or private companies.” In fact, as early as the beginning of 2022, a consumer FA mentioned to cic.com that when financing some projects, it will also work for the founders, “the price should be reduced or the price should be reduced. Don’t tangle with the valuation too much. Getting the money is the first.” But at that time, many founders were too optimistic about the company and the market and usually didn’t lower their profile first. The above FA also cited an example as saying, “an enterprise got TS at that time with persistent valuation, but there was no more below. Now the founders want to reduce valuation financing, but the capital to pay is less and less.” However, some FA told China investment network that although on the whole, the current project valuation in the domestic market has decreased, many founders still choose hard resistance and do not take the initiative to relax their valuation expectations. “Unless the investor puts it forward, it will give way half hidden.” A “bubble squeeze” campaign is in full swing. The valuation of the primary market is not just in the consumer sector. The continued sluggishness of the secondary market in 2022 has been transmitted to various competition channels, including medical treatment, hard technology, etc. Take the medical sector as an example. The upside down and continuous decline of valuation has almost become a common trend in the market. Many enterprises are listed at a discount, and the issue price is even lower than that in the first two rounds of financing. Liu Xiaochen, a medical investor, told china.com that the financing of medical enterprises in the late stage, especially the crossover round, has become very cold. “Many funds invested in this stage in the past one or two years have basically lost money, and they have become very cautious.” Liu Xiaochen felt that there were signs of adjustment in rounds B and C, including in earlier stages. Compared with the past, investors will pay more attention to the fundamentals of the enterprise, such as whether there is real independent innovation ability, the degree of product verification, the size of the future market, etc. these considerations will affect the final valuation and pricing of the subject matter. “Now the valuation of the whole biomedical field is being adjusted downward, but it may not be completely adjusted.” Another investor who has long paid attention to the medical track also said that now the investors in the primary market have become a lot calmer and don’t even dare to sell. “In the late stage of investment, people are more injured. Everyone gets together very early. Many investors begin to ‘pick up’ Professor information one by one on the websites of major colleges and universities.” Under the depressed market sentiment, some investors who invest in semiconductors are not so generous. Xia Lin, an investor in hard science and technology, said that unlike the original one-stop investment in hot projects, now peers will pay more attention to the rationality of valuation when looking at projects. Xia Lin once encountered such a case: a company’s external financing valuation was 2 billion yuan, and some investors thought that the valuation was too high and had to be reduced to 1.5 billion yuan. But the company said frankly to the counter-offer investors, “I think what you said is reasonable, and I also recognize the valuation of 1.5 billion yuan. But the reality is that we can probably sell 2 billion yuan, and we will give priority to higher prices.” In the end, the investor insisted that the valuation was too high, so he turned around directly. An investor who pays attention to new materials told China investment network that although it did not obviously feel the decline in the valuation of the track, the financing progress of the enterprise was indeed slowing down. Investors: this round of valuation adjustment in the primary market for projects with high valuation pass in the past has made many value investors call “it’s a good thing”. Meng Hui, a PE partner of a head, lamented that the valuation system of many so-called hot projects in the market in the past two or three years is untenable. “The crazy pursuit of institutions makes the business actions of some enterprises completely deformed and do not follow the development rules