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Unicorn companies aren't that special anymore

Feb 13, 2024 - qz.com
The number of unicorn companies, privately-backed firms with billion-dollar valuations, has surged from 87 to 1,381 over the past decade, according to a report from Morningstar Unicorn Market Monitor. The total market value of these companies has also increased from $235 billion to $4.5 trillion. The US is home to the majority of these unicorns, but China and India have seen the fastest growth since 2020. The report also found that unicorns are staying private for longer, with their average lifespan before exit increasing from 6.9 to 10.7 years.

In 2023, despite VC fundraising hitting a six-year low, unicorn companies in the AI space remained popular, with 44% of new unicorns dedicated to AI and machine learning. However, when these unicorns decide to go public, they may end up with lower-than-expected valuations due to various factors, including growth projections and a founder’s ego.

Key takeaways:

  • The number of unicorn companies, privately-backed companies with billion-dollar valuations, has surged from 87 to 1,381 over the past 10 years, with the total market value captured by unicorns soaring from $235 billion to $4.5 trillion.
  • The US remains home to most unicorns, but China and India have experienced the fastest growth since 2020, by 63% and 200%, respectively.
  • Despite a six-year low in VC fundraising in 2023, unicorn companies in the AI space remain popular, with 44% of new unicorn companies dedicated to AI and machine learning.
  • Unicorns are living longer than ever, with their average life span to exit increasing from 6.9 years to 10.7 years, indicating that private companies have ample access to capital to sustain their growth.
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