As private company valuations continue to skyrocket, billion-dollar businesses are becoming less and less rare in the world of venture capital. As of June 30, there were 187 unicorns in the US, boasting an aggregate valuation of more than $600 billion—and that's without the staggering valuations of companies like
Lyft, now that both have gone public.
2019 Unicorn Report, PitchBook research analysts take a deep dive into the key trends around the unicorn phenomenon, including dealmaking, funding and exits. For a quick look at the highlights, check out some of our favorite charts from the report. Aggregate valuation reaches $600B for the second time In 2018, the combined private valuation of active unicorns in the US reached $603.3 billion, and despite several significant unicorn exits in 1H 2019, that aggregate value has remained nearly flat. About half of that amount is concentrated in unicorns that are at least three years old, with those companies founded in mid-2016 or earlier holding an aggregate value of roughly $295 billion.
Unicorn count and aggregate post-money valuation Unicorns double down on fundraising In total, billion-dollar companies that are at least three years old have raised more than $43 billion through 1H 2019. Such a significant amount of capital is a clear example of how these companies have focused on fundraising to ensure they have enough cash to grow, given the trend of VC-backed companies staying private for longer.
VC raised ($B) by active unicorns 3+ years old Unicorn deal count is growing, but new unicorns raise fewer rounds Over the past three and a half years, the number of rounds raised by billion-dollar companies has steadily risen, with both initial and subsequent unicorn rounds in 2018 up more than 50% YoY. This year is on pace to continue that growth, albeit at a slightly slower rate. Another trend? The focus on raising capital while staying private longer has kept the number of initial unicorn rounds trailing that of subsequent unicorn financings.
Initial unicorn financing versus subsequent unicorn financings (#) After record year, deal value slows in 2019 Last year, initial and subsequent unicorn financings brought in almost $46 billion combined, driven in large part by the nearly $33 billion raised by companies that had already hit the billion-dollar threshold. In 2019, initial unicorn financings have brought in about $7.7 billion, on pace to exceed 2018's total, but the subsequent funding rounds have brought in just $12.4 billion, well off last year's total.
Initial unicorn financing versus subsequent unicorn financings ($B) Average unicorn financing size spikes The median deal size for unicorn funding rounds has hovered steadily between $130 million and $175 million over the past five years, with 1H 2019 sitting roughly in the middle. By contrast, the average deal size for billion-dollar companies reached nearly $400 million in 2018, thanks to the ever-increasing amount and size of mega-deals.
Median and average unicorn deal size ($M) Unicorn exits drive a record year in VC Exits have been one of the biggest storylines in US venture capital this year, with 2Q 2019 representing
the largest quarterly exit value to date, a total of $198 billion. Unicorns have driven much of that value, with the 14 unicorn exits through June 30 accounting for nearly $160 billion.
Unicorn exit activity IPOs dominate unicorn exit activity Of the 14 unicorn exits in 1H, 10 were IPOs and four were acquisitions. The public debuts accounted for an outsized proportion of the exit value, coming in at $142 billion. Because of their size, most unicorns aren't M&A targets for anyone but the biggest acquirers—frequently tech giants like
SAP, which agreed to purchase
Qualtrics last November for $8 billion and closed the deal in January.
Unicorn exits (#) by type
Featured image via terng99/iStock/Getty Images Plus