How US tech sell-off will affect Indian startups

The Freshworks stock has quietly slumped by nearly 47% from its highest point on Nasdaq about a month ago. More importantly, it is down by around 20% from the public offering price of $36. At the closing bell last Friday, the share price was $28.46.

The fall in Freshworks’ market capitalisation comes as part of a broader sell-off in high-growth technology stocks in the US led by software or cloud computing players. 

Video-conferencing company Zoom and e-signature firm DocuSign, which emerged as winners during the pandemic, have suffered a drop of 35% and 52%, respectively, over the past month. Their growth has slowed as the US economy moves beyond work from home, a prediction a top venture capitalist had shared with The CapTable months ago.

Even Salesforce, the largest cloud computing player, has seen a 16% decrease in the same period.

Hit zone: It’s not just software companies. The share prices of food delivery company DoorDash and ride-hailing firm Uber are down by 24% and 20%, respectively. Tech giants Google, Microsoft and Facebook have also felt the pinch. 

ARK Innovation Exchange Traded Fund (ETF), which bets specifically on high-momentum tech companies, has fallen by 25% this year, even though the broader market is up by 21%, according to WSJ.