Dead unicorns

Battery Ventures’ OpenCloud 2023 report included this chart of private unicorns (more than 1000) vs software IPOs in the last ten years (176).

Some thoughts:

  • The unicorns are at last round valuation (often from 2020-2021). Public cross-over investors like Fidelity has already written down the valuations of highly valued companies like Reddit and Discord. I.e. many unicorns at last round valuation really aren’t unicorns today.
  • Many unicorns were unicorns in name and structure (i.e preference shares and other terms) only, not in performance (with something like $50+ million in revenue/ARR, good gross margins and strong growth required)
  • Many startups that build great products and grow revenue fast to $50-100 million and beyond will remain unicorns and become even more highly valued