The Prolonged Write-Downs in Enterprise Software Startups

It’s not easy to run an enterprise software company these days. For the nth example of this, read the latest story by my colleague Laura Bratton, who describes how an Atlanta real estate manager replaced Salesforce software with a custom app developed using Replit and Claude Code—saving $100,000 a year. Yipes. 

Fears that companies will replace their software subscriptions with cheaper AI tools have hammered not just publicly traded stocks but the valuations of private companies. While we don’t often get a look at these private valuations unless the startups sell more shares, mutual fund disclosures give a glimpse into how big public investors are feeling. As the attached chart shows, for most it’s pretty bleak.