It looks like the pace of making latest unicorns is picking up again, as was their minting in earlier stages of financing.
As of July, 70 latest unicorns—private firms valued at $1 billion or more—have been created. Perhaps surprisingly, 28 of those firms received a unicorn horn after an early round of funding—defined as seed, Series A, or Series B—in line with an evaluation of Crunchbase data.
That’s just one fewer than the 29 baby unicorns created in all of last yr — though it’s still significantly fewer than in 2021 and 2022, when 107 and 77 early-stage unicorns were created, respectively.
Back to old habits?
While it’s definitely not 2021 in the enterprise capital world, it’s price noting that investors once again seem willing to speculate at high valuations, even if the company is still relatively young in the maturation process.
Not too shockingly, it’s mostly AI that’s leading the way. Almost a dozen early unicorns are generative AI or AI-heavy startups. That list includes:
But it wasn’t all AI when it got here to creating early-stage unicorns. Perhaps most notably, in the much-criticized Web3 sector, three startups achieved unicorn status after early funding: blockchain platform Berachain Raised $100M Series B at $1.5B valuation; New York-based Layer 1 blockchain Monad raised $225 million in Series A funding led by cryptocurrency investor Paradigm at a valuation of $1 billion; and an infrastructure platform Network of polyhedra raised $20 million at a $1 billion valuation.
In fact, many sectors have seen at least one startup reach valuations of $1 billion or more after early funding, including retail (Grapes), space (Yuanxin Satellite) and defense (Saronic).
What does it mean
It’s hard to attract any serious conclusions from the undeniable fact that more early-stage startups are being minted as unicorns than last yr. But it’s telling that investors have been talking about falling valuations and self-correction for the past few quarters — while on the other hand, very young firms in the earliest stages of growth and funding are being valued at $1 billion or more.
This could be a blip, as 17 early-stage unicorns were created in the first quarter of the yr, while that number fell by more than half to simply eight in the second quarter (three were created in July).
Just a few years ago, we witnessed investors—fearing to miss out on the next big thing—rushing to fund firms at the earliest stages of their development, at absurdly high valuations.
Surely it won’t occur again so soon?