LAS VEGAS (AP) — More than 1,000 startups showcase their products at the annual CES Tech Show in Las Vegas. They want to create buzz about their gadgets and attract investors who can help them grow their business.
But in an economy plagued by high inflation and interest rates, with mass layoffs in the tech industry, many are turning to cautious investors looking for products that deliver quick returns, not the hype. may face.
Analysts say this year’s event has a slightly more subdued tone compared to previous shows, where many companies regularly announced pie-in-the-sky projects that never saw the light of day. Carolina Milanesi, president and principal analyst at consumer technology research firm Creative Strategies, said many of the tech items on display during the show’s media previews on Tuesday and Wednesday. said it was less “glamorous” compared to previous years. So, we talked about microwaves and introduced smart girlfriend jeans that vibrate directly to the user.
“The economy, and the general mood is a little negative on technology,” Milanesi said. “Companies are becoming more focused on real value for their customers.”
CES, the world’s most influential tech gathering, officially kicks off for industry attendees on Thursday. About 3,000 companies have registered for the event, including those who have laid off thousands of employees and diversified underperforming areas of their business amid broader economic uncertainty. This includes large companies like Amazon, which is shrinking.
At the same time, many startups are trying to find wings for themselves at a time when consumers are tightening their belts and becoming more picky about how they spend their money. It could be particularly difficult for companies that manufacture clothing products, he said. Manufacturing gadgets usually requires a large amount of investment and often faces the challenge of securing the necessary funds.
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Marco Snikkers, founder and CEO of OneThird, a maturity-testing startup, said investors have been very critical of which companies to fund this year. Securing an investment in his own company took much longer than expected, but luckily some of the existing investors stepped in to help and the company didn’t run out of cash. he said. They were able to secure more funding last month.
“We hope to get through 2023 with what we have now,” Snikkers said, adding that the Dutch-based company also has an app and hopes to expand its offering to the U.S. I added that there are
Another CES attendee, Mohamed Soliman, founder of French electric skating startup AtmosGear, said investors were more afraid to put money into projects throughout the pandemic, saying companies would be more likely to spend money before peeling the skin on the game. He said he wanted a higher level of maturity. .
Wedbush analyst Dan Ives said: “The clock has struck midnight in terms of technology investors giving away money for free. There’s even more competition for capital.”
A change from the past, when more analysts and investors focused on company growth, saving money is now a top priority for the tech industry. Ives said that unlike products like drones, which generated a lot of buzz at previous shows but didn’t have a clear revenue stream, investors can now deploy things like artificial intelligence, chip technology, and electric vehicles. He said he was trying to fund things.
The show also showcases more innovative tech themes such as the extensive use of virtual reality and immersive experiences in the metaverse. Despite some skepticism about the metaverse, Ives said he believes all these technologies can lay the foundation for what is likely to be the Fourth Industrial Revolution.
But for now, he said, a recession could be on the horizon. “And I think that’s the elephant in his room at CES this year.”
Event organizers say the excitement hasn’t abated. Bryan Comiskey, director of themed programs for the Consumer Technology Association, said many startups are returning to the event to engage directly with investors after COVID kept many away over the past two years. He said he is looking forward to what he can do. indicate.
The organization also has a program called CTA Match, which pairs startups with investors who might be interested in their products, he said, adding that many companies have a ready-to-deploy item or met. He added that it is an innovation that can be deployed if suitable investor.
But even entrepreneurs who raise capital face rising costs from inflation. That, coupled with a more difficult investment scene, could mean more companies fail to make it. says.
Still, startups are trying to make the most of the show, creating buzz for their products in order to grab some headlines and get free marketing, Csathy said.
“I don’t think the pie-in-the-sky, super cool, super novel gadget is going away,” he said. Maybe we just didn’t get it.”
Associated Press staff writers Adriana Morga, Brittany Peterson, and Cara Rubinsky contributed to this report.