Cheap money is ending: only the most exceptional startups will thrive in 2022!

The year 2022 marks a turning point not only in the economy but also in startup financing. After years of quantitative easing—where central banks increased the money supply and made credit easily available—a period of rationalization is beginning.

While in recent years easy access to funding became the norm, 2022 brings higher inflation (with Slovakia’s average inflation estimated close to 6%), which will further erode people’s savings. The US Federal Reserve (FED) is expected to raise interest rates during the year, pulling billions of dollars out of circulation. Other central banks worldwide are likely to follow suit, tightening access to “cheap money.”

These changes will inevitably affect startup financing. Over the past decade, and especially since the COVID-19 pandemic began, investors worldwide poured funds into startups and young companies seeking capital through IPOs. With inflation eroding cash value and traditional safe assets like bonds yielding near-zero or even negative returns, investors sought new ways to grow their money. Supporting early-stage companies became a popular investment strategy alongside traditional equity funds and shares in established global firms.

Due to the scarcity of attractive investments, investors were willing to fund almost anything until early 2022. Examples include startups like WeWork, MoviePass, and Quibi, which raised millions or even billions despite weak business models. However, at the start of 2022, investors faced a harsh lesson as stock prices—especially in tech giants like Paypal, Netflix, and Sony—experienced unprecedented drops.

These factors contribute to greater investor skepticism. While investment will continue—after all, free capital must be allocated—it is likely startups will face stricter evaluation criteria. Buzzwords like “technology-driven,” “data-powered,” or “analytics-based” alone will no longer guarantee funding.

At Wanderer Capital, we see this not as a restriction but as a necessary correction that will benefit the world by allowing only the best startups—those addressing real social, technological, and labor challenges—to succeed. The global financial changes starting in early 2022 may reach Slovakia with some delay. Currently, there is still funding available for startups here, but truly globally competitive projects are few. We hope to help change that by supporting more high-potential startups!

Article by: Michaela Královičová

Tags: startup , investments, financing, stocks, investment opportunities