Now that we are halfway through 2020, we thought it would be a good time to check in and report on the latest unicorn data.
Leading industries for new unicorn companies this year include education–with four new unicorns; Quizlet, Udemy, ApplyBoard, Course Hero–and software service companies, including Notion (workplace collaboration), Figma (design collaboration), and Podium (local customer communication).
Software services and online education have grown as new unicorn candidates while fintech and branded e-commerce take a back seat in the 2020 crop of new unicorns so far.
New unicorn cohort of 2020
There were 44 new companies that joined our unicorn list at a rate of a new unicorn every three or so working days so far in 2020. This cohort has reportedly added $64 billion to private unicorn valuations along with close to $12 billion in total funding to date–with an average of $300 million raised by each of these new 2020 unicorns.
The latest additions bring the list to over 601 companies–the highest count to date that are still private. These unicorns have collectively raised $442 billion and are valued at just under $2 trillion. (Valuation totals are based on a combination of media reports and publicly available data.) The average raise for these 600-plus unicorns is now around $735 million with an average valuation of $3.3 billion.
Just over a year ago–in May 2019–we reported on 452 unicorns with an aggregate valuation of $1.6 trillion.
The most highly valued new unicorns of 2020 are U.K.-based electric vehicle tech company Arrival, U.S.-based autonomous driving solutions company Pony.ai, and India-based biotech company Biocon Biologics, each valued at or above $3 billion.
By contrast, 2018 had the highest count of new unicorns at the time with 169. Those unicorns have raised $112 billion over time and are valued collectively at $514 billion as of June 2020 (see chart below). With 261 working days, a new unicorn was announced every 1.5 days in 2018, double the rate of new unicorns in 2020.
The new unicorns of 2020 come from 11 countries: The majority are U.S. based (27); four are based in China; three hail from the United Kingdom; and Israel and India have two new unicorns each.
China peaked for new unicorn companies in 2018 at 60, a number that dropped significantly, to 28, in 2019.
The exit market
The majority of unicorn companies–two-thirds over the last five years–exit by IPO. These likely IPO market candidates make unicorn companies attractive to alternative investors who want stock at or before the IPO.
The highest count of exits–55–was in 2018, with 41 IPOs and 14 acquisitions.
The total exit value over this five-year and five-month time period–from January 2015-June 2020–is $810 billion. Total exits for unicorn companies break down to:
- $140 billion for acquired companies; and
- $670 billion in company value at their IPOs.
To meet the current value of private companies at $2 trillion, the exit market would need to increase by a factor of 2.5 times.
Unicorn exits in 2020
In 2020 to date, the majority of unicorn exits have been acquired as the IPO market has slowed down. Of the seven acquisitions, the highest-value acquisition is for cloud services company Infor, acquired by Koch Industries for $13 billion. With fintech companies acquired by both Intuit and Visa, the 2020 acquisition market is up substantially year over year.
We also took a look at exit values above the last post-money value for acquisitions and IPOs.
For companies exiting in 2018, their last private valuation in Crunchbase valued them at $235 billion. Their IPO valuation and acquired value was $364 billion, representing 55 percent growth, or $129 billion, above the last private valuation.
For the 12 exits so far in 2020, the market capitalization at IPO and acquired price values these companies at $50 billion, with $24 billion in exit value or 91 percent growth in value exceeding the last private valuation recorded for these companies at $26 billion.
The highest 2019 performer Zoom raised a total of $160 million in private capital, far less than the median of $405 million for 2018 IPO unicorns. The company’s last private valuation was in 2017 for its Series D round led by Sequoia Capital, valuing the company at $1 billion. Zoom raised $751 million with a valuation of $9.2 billion at its IPO. As of June 26, Zoom is valued at $72.4 billion with over 600 percent growth in its stock price since going public.
As a result, the IPO market looks to be opening up with insurance company Lemonade, cloud data company Snowflake, data analytics company Palantir Technologies, and bank operating systems nCino having all filed to go public in the past month.
Will this momentum in adoption of cloud technologies enforced by the pandemic make the rest of 2020 a strong IPO market for unicorns?SIGN UP