Unicorns are rare. Kids know that, and it's why the name stuck as the descriptor for private startup companies that were valued at more than $1bn. But recently, amidst a frenzy of funding activity, unicorns have become a lot less special. Data from a new CB Insights report reveals that 136 unicorns were created in the second quarter of this year — which is more than for all of 2017, when 85 companies made it into the "three comma club".
FOMO
With stock markets near record highs, economic activity returning (kinda) and interest rates still at historic lows it's no surprise that there is a lot of money sloshing around trying to find a home in the next Facebook, Google or Amazon. As competition intensifies for the hottest deals the "fear of missing out" (FOMO) gets pretty real, and investors are willing to give the same money for a smaller slice of the equity pie — which means higher valuations for the startups themselves.
Data from another source (Pitchbook) finds that it's a similar story in early-stage investing. A decade ago the median early-stage pre-money valuation for a startup was somewhere around $10m. Today it's more like $40m. If you would like to fund Chartr at this kind of valuation please get in touch.
