New data collected by Crunchbase News indicates the value of global unicorns has hit the $4 trillion mark. The valuation milestone stands out not only for its scale, but also for its relative size.
Compared to what? The value of the great tech companies of the West, namely the American Big Five. They were once known as Google, Microsoft, Apple, Amazon and Facebook. Today, the group is known as Alphabet, Microsoft, Apple, Amazon and Meta, with the youngest two of the group of five companies undergoing name changes in recent years.
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Corporate branding is shifting, it was in 2017 that the five companies together reached a value of $3 trillion. At the time, it was staggering that less than half a dozen companies could be worth so much. A year later, in mid-2018, the group broke the $4 trillion mark. (Note: Alex used to work for Crunchbase on the Crunchbase News team and owns stock in the company. We pull from numerous data sources here at Marketingwithanoy, but will notice this particular issue from time to time when we rely heavily on Crunchbase data.)
But 2018 was not the pinnacle, as you can imagine. The five companies even managed to double their value to more than $8 trillion when the shares peaked in late 2021; since then, the total has fallen to $7.2 trillion from last Friday’s closing price, Wolfram Alpha data shows.
Unicorns have seen a similar rate of value expansion, albeit offset by a few years. Crunchbase News, for example, reported last summer that the total value of global unicorns had reached $3 trillion, up from $2 trillion the year before. That, by the way, is the result of all those funding rounds last year that seemed to push more and more startups into the $1 billion valuation club, earning what is popularly known as “unicorn” status, a term coined on Marketingwithanoy back. in 2013.
The comparison between the five most valuable US tech companies and a loose group of high-quality startups on a global basis may seem somewhat misleading; why compare the two numbers except to enjoy playing with very large numbers?
After years of rising in unison, we may see a divergence in their two valuation directions. The biggest tech companies are taking some chunks, with Meta in particular losing value. By contrast, the next generation of tech leaders is, well, raising a lot of money and building value for the private market.
Crunchbase News data does not indicate a slowdown in the rate at which unicorns build illiquid value. We expect the value of global unicorns to rise this year, perhaps at a slower pace – if the “slowing things down in venture land” story is true and more than venture capitalists’ hopes of lower startup prices – but still in a slightly opposite way. to the value of the five American technology companies that anyone can name.
Normally at this point we would say something rude about expensive startups, and ask how much value there really is in the collection of unicorns that looks more like a horde than a cohort. But! Not today. Instead, we wonder if the value of global unicorns compared to the market cap of megatechs is a fun ratio or statistic to track over time. If the private markets are building a lot of valuable value, maybe we should see that unicorns are worth more than majors? That would be encouraging, at least from an antitrust perspective.
Of course, there are huge caveats to such a comparison. The pace of unicorns’ liquidity will affect the ratio, meaning a weak unicorn exit market could better store the value of the private market and make unicorns look better than they could actually be . At the same time, a slow unicorn exit market would, in theory, hurt the value of those companies, so there are side effects in a way that we want to smooth out the equation.
Anyway, the value of unicorn is higher than ever. This implies the need for an eventual liquidity waterfall for the companies represented by the metric.
Let’s dive into the numbers and orientate ourselves on the unicorns that are now worth over $4,200,000,000,000 in total.