Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s inspired by what the weekday Exchange column digs into, but free, and made for your weekend reading. Want it in your inbox every Saturday? Sign up here.
Our work this week kicked off in China, dug into African startup activity, dealt with China once again, took an intense dive into the Latin American startup ecosystem, and wrapped with a second look at the Robinhood IPO. In other words, not much was going on at all!
You may have been surprised to see Amazon’s stock fall off a cliff Friday. After all, the company posted substantial revenue gains to just over $113 billion during the quarter. And AWS, its public cloud business, seemed to tick along nicely.
But investors had expected more growth and had priced the Seattle-based e-commerce player accordingly. When Amazon missed revenue expectations and projected Q3 2021 growth of “between 10% and 16% compared with third-quarter 2020,” investors let go of its stock.
But as some in the financial press note, it’s not just Amazon that’s taking stick from investors. Etsy and eBay also fell this week. It appears that investors are anticipating that a period of turbocharged growth in e-commerce thanks to the COVID-19 pandemic is slowing at least and may be over. That means valuations are going to get reset at a host of companies, startups included.
Not that every company slowing down after the pandemic’s early phases is suffering, Duolingo managed an intense opening week as a public company despite slowing growth. But delta variant or not, the investing classes are changing their market framing. We’d be wise to keep that in mind.