Illustration by Jeremy Enecio for Fortune

Rivalries! Ratchets! Markdowns! Wistful sadness!

By Erin Griffith
December 30, 2015

Early in 2015, Fortune deemed tech’s current boom “The Age of Unicorns,” citing the proliferation of startups valued at $1 billion or more.

We wondered if those good times might be nearing an end.

But throughout the year, so-called startup unicorns continued to rise, even as signs of impending doom did, too. It created a contradictory year of headlines with no clear narrative. The venture capitalists’ warnings about “dead unicorns” were louder than ever, the cash burns were higher than ever, and at times it felt like public scorn of Silicon Valley peaked. Just when it looked like the bubble was about to burst, another wave of startups raised money at billion-dollar valuations. Everyone shrugged and continued on their high growth trajectory as normal. Even today, VC’s still can’t agree whether we’re in a tech bubble, let alone what to do about it.

Below, a roundup of the most notable twists and turns in the world of high stakes, high growth, highly paradoxical startups in 2015.


January: Box’s IPO prices below its last private valuation

Sam Schillace (R), along with Box CEO Aaron Levie (L) and Head of Mobile Martin Destagnol (C).
Photo Courtesy Box

The cloud storage company went public at a market cap of $1.67 billion, which was $730 million lower than private investors had previously assigned.


February: Welcome to the Age of Unicorns

Stewart Butterfield, CEO and founder of collaboration startup Slack, on the importance of getting a $1 billion valuation: “One billion is better than $800 million because it’s the psychological threshold for potential customers, employees, and the press.”

Alan Patricof, founder of Greycroft Partners, on the struggles unicorn startups may face: “At some point all of these companies will be valued on a multiple of [profits]. If the IPO market goes away, or for any reason there’s a blip in the outlook, people could be left holding a lot of inventory they wish they didn’t have.”

Jason Green, a venture capitalist with Emergence Capital Partners, coins the term “decacorns,” referring to startups valued at $10 billion or more.


March: Bill Gurley predicts “dead unicorns”

At the annual South by Southwest technology festival, investor Bill Gurley spoke about dangerous attitudes at startups and venture firms: “There is no fear in Silicon Valley right now. A complete absence of fear.”

Meanwhile, Goldman Sachs invades SXSW by offering friendship bracelets to tech startups.

Entrepreneur James Clark coins the term “unicorpse”for doomed unicorn companies.


April: Funding flourishes...

Soap bubble
Photograph by Getty Images

Startups demand “one-on-one” deals, or $100 million investments on $1 billion valuations. In less frothy times, a startup would have asked for $100 million at a valuation of $500 million.


...yet tech IPOs remain rare

So far there’s Etsy, Box, a handful of biotechs, and not much else.


May: Activist investor Carl Icahn backs Lyft

Carl Icahn
Photograph by Heidi Gutman — CNBC/NBCU Photo Bank via Getty Images

The Lyft-Uber ride-sharing rivalry was tense all year. Chris Sacca, an investor in Uber, fired shots, calling Icahn’s $100 million investment in Lyft “a big mistake.”

“I think there are naive investors with no discipline, throwing out term sheets at nine figures right now, with no diligence,” he said in an interview with Bloomberg TV.


June: Andreessen Horowitz: “We’re not in a bubble”

Marc Andreessen at the Fortune Global Forum event.
Photograph by Stuart Isett/Fortune Global Forum

The lack of IPOs for billion-dollar companies only means the growth happens in private markets, which is good for private market investors like venture capitalists, the firm argued to its investors.


Fitbit goes public

NEW YORK, NY - JUNE 18: Fitbit Chief Executive James Park (C) rings the bell for the company's IPO debut at the New York Stock Exchange on June 18, 2015 in New York City. Fitbit Inc. opened 52% above their IPO price during its market debut. (Photo by Eric Thayer/Getty Images)
Photograph by Eric Thayer — Getty Images

The fitness tracking company’s shares jumped 50% on its first day of trading and remain above their IPO price.


Airbnb valued at $25.5 billion valuation

Brian Chesky, Chief Executive of Airbnb
Photograph by Denis Balibouse—Reuter

The room rental company raised $1.5 billion, and added another $100 million to the round a few months later.


July: Funding accelerates

Courtesy CB Insights

More than 100 startups raised funding rounds of $100 million or higher in the first half of the year. Venture funding in the US was on track to top $70 billion in 2015, beating last year’s already-high $56.4 billion.


August: A firm called Unicorn Capital launches with $12 million to invest

This unicorn is lonely.
Photograph by Getty Images/Image Source

Have we hit peak unicorn yet?


The New York Times predicts 50 “future unicorns”

Courtesy of Gusto

At least six companies on the newspaper’s list—ZenPayroll (now known as Gusto), Thumbtack, Okta, HelloFresh, Ele.me, Avant have since joined the billion-dollar club.


Leaked documents show Uber is burning a ton of cash

It calls into question the sustainability of the entire ecosystem of “Uber for X” startups that have applied Uber’s business model to other industries.


Venture investors make “dying unicorn lists”

Alistair Forrester Shankie (c) Alistair Forrester Shankie

They’re circling potential failures like vultures and hoping their portfolio companies can snap up talent on the cheap.


September: Tech bubble talk reaches a boiling point

Vinod Khosla, founder of Khosla Ventures, speaks at the TechCrunch Disrupt conference in San Francisco, California, U.S., on Wednesday, Sept. 29, 2010. Khosla discussed the future of technology startups, the outlook for the biofuels market and investment opportunities. Photographer: Noah Berger/Bloomberg via Getty Images
Photograph by Bloomberg/ Getty Images

And some investors are feeling defensive. Vinod Khosla retorts, “Who cares whether they’re overvalued or not?” in a tense on-stage interview.


They’ll let anyone in

Courtesy CB Insights

This CB Insights chart shows just how crowded the unicorn club has become.


The "unicorn economy" booms...

A man enter the doors of the WeWork co-operative co-working space on March 13, 2013 in Washington, D.C.
Photograph by Mandel Ngan — AFP/Getty Images

As unicorns proliferate, a class of businesses that cater to their specialized needs thrives, from artisanal office furniture and gourmet catering to recruiting services. TaskUs, a startup that provides outsourcing services to venture-backed startups, raised its venture funding of its own. WeWork, which rents office space to startups (and other small businesses), is a startup unicorn itself.

Startups serving other startups is a funny enough concept that the New Yorker made it into a cartoon.


...but the “gig economy” is under attack

Chart by Stacy Jones

Uber, Lyft and other highly valued startups that rely on contract workers face regulatory scrutiny.

Fortune’s Stephen Gandel calculates that it could cost Uber $4.1 billion to convert all of its drivers to full employees.


Funding remains strong, exits remain weak

Ryan Smith
Photograph by James Winegar

Fortune counts 59 new unicorns for the year, but only three IPOs.

Getting kudos for a large fundraise is “like congratulating someone for taking on their mortgage,” Qualtrics CEO Ryan Smith said at Fortune’s Brainstorm Tech conference.


VCs predict danger (for other peoples' portfolios)

Michael Moritz, a partner with Sequoia Capital, listens during the TechCrunch Disrupt conference in San Francisco, California, U.S., on Tuesday, Sept. 28, 2010.
Photograph by Noah Berger — Bloomberg via Getty Images

Venture Capitalist Michael Moritz argues that many unicorns are “subprime unicorns” — not worth $1 billion. Prominent investors Brad Feld, Aileen Lee, Fred Wilson, Mark Suster and others chime in, predicting difficulty ahead. The VC warnings feel paradoxical—everyone believes a correction is coming, but no one believes their own companies are in danger. It’s the “everyone but me” correction.


Reality sets in

Photograph by Getty Images/iStockphoto

Fortune calculates that if all 90 of the U.S.-based unicorns went public, IPO investors would have to buy $131 billion worth of newly issued shares. It’ll be a stretch: Last year, only 22 tech companies went public, raising just $7.6 billion. The market for all IPOs this year so far is only $35 billion, down from the $56 billion average over the last 20 years.

Meanwhile the Wall Street Journal reports that IPO investors are have lost a median of 13% this year, and that tech companies made up just 14% of all U.S. IPOs this year, the lowest since the mid-90s.


Good times, RIP?

“All I see is wistful sadness, like children at the end of summer vacation. All anyone really knows for sure is that hard work and more than a little uncertainty lies ahead,” writes Fortune’s Dan Primack.


PE firms dabble in VC

Henry Kravis, Co-chairman and Co-CEO, KKR at Fortune Brainstorm Tech in Aspen, CO on July 13th, 2015.
Photograph by Kevin Moloney — Fortune Brainstorm Tech

In the dotcom bubble, private equity firms dipped down into the startup investing game, only to retreat when the market fell apart. They’re at it again—KKR, for example, is raising a growth equity investment fund.


November: Square’s low IPO

Square CEO Jack Dorsey gets a birthday kiss from his mother, Marcia Dorsey, before his company's IPO at the New York Stock Exchange, Thursday, Nov. 19, 2015. Square, the 6-year-old startup known for its white, cube-shaped card readers that plug into smartphones, is surging in its first day as a publicly traded company. (AP Photo/Richard Drew)
Photograph by Richard Drew — AP

The payments company priced its IPO at $2.9 billion, far below the value of its last private round of funding of $6 billion. Despite strong first-day gains, Square stock has remained below the $6 billion mark. Because of its low IPO price, the company’s later stage investors exercised “ratchet” provisions, which diluted earlier investors and employees in order to make the late stage investors whole.

The year closes with four tech unicorn IPOs: Pure Storage, Box, Square and Atlassian. (Two other startups that went public, Etsy and Fitbit, were not worth $1 billion while private.)


Fidelity markdowns rock the unicorn world

Photograph by Alessandro Bianchi — Reuters

The mutual fund lowered the book value of its stakes in companies like Snapchat, Zenefits, Blue Bottle Coffee and Dataminr, which signaled Fidelity had less confidence in its investments. The markdown set off a wave of negative press for the private companies that had previously controlled the narrative around their growth. Funds managed by The Hartford and T. Rowe Price did the same.


Unicorns take a beating in the media

Photograph by Karl-Josef Hildenbrand — AFP/Getty Images

In aggregate, the reports paint an ugly picture at many of the unicorns: Missed financial targets by Zenefits, a questions about a the business model at Snapchat, a cash crunch at Jet, an executive exodus at Rent the RunwayDropbox faces doubts about its revenue potential. Theranos is losing business deals. And don’t forget WeWork’s highly risky real estate deals, and unrealized revenue projections at Lyft. Flipboard failed to find a buyer. Square priced its IPO underwater. Zirtual and Homejoy—not unicorns, but highly valued and highly funded all the same—abruptly shut down.”


VC’s get defensive

The accusations of fraud, impropriety are probably nonsense. Instead, People working very hard to try and will something new in reality.

— Josh Elman (@joshelman) October 16, 2015

With each critical report on venture-backed startups, investors have taken to Twitter to defend the startups in question, even when they’re not direct investors. Above, investor Josh Elman dismisses parts of a lengthy Wall Street Journal investigation of $9 billion blood testing startup Theranos as “probably nonsense.”


Just kidding about those markdowns!

Photograph by Miguel Medina — AFP/Getty Images

Fidelity marks up its stakes in Snapchat and Dropbox. Got whiplash yet?


December: Uber worth $62.5 billion

Photograph by David Paul Morris — Getty Images

According to widespread reports, the world’s most valuable privately held startup is now worth $62.5 billion. Notably, Uber’s latest round of funding contains an investment from Tiger Global. That means Uber now shares an investor with rival Lyft, which is incredibly rare for any competing startups, let alone a rivalry as storied as this one.

Meanwhile, Lyft partnered with a spate of on-demand ride services from around the world, forming “a global anti-Uber alliance,” a possible signal that Lyft will not pursue its own international expansion.


Founders prepare for a difficult 2016

Photograph by Paul Edmondson—Getty Images/Mint Images RF

Almost all of the startup founders surveyed by First Round Capital say they expect it to be harder for them to raise funding next year. Three quarters of them believe we’re now in a tech bubble.


Unicorn Tears

WSJ reports that flash sales site Gilt Groupe will sell for around $250 million. The company, once valued at more than $1 billion, has raised $280 million in venture capital.

Meanwhile fantasy sports betting startups FanDuel and DraftKings are banned in New York and face a potential ban in other states, including Illinois.

Unicorn Tears-themed gear, including booze, purses, water, and vape-able e-juice becomes a hot holiday gift (in the Fortune offices, at least).


When the bubble bursts, who will it hurt?

Photograph by Thomas Barwick — Getty Images

Startup employees, according to Bloomberg, or Wired, or the New York Times.


"Haves and have-nots"

Slack CEO Stuart Butterfield
Photograph by Bloomberg via Getty Images

Not every unicorn is struggling. Collaboration software startup Slack, whose CEO we quoted at the start of this timeline, has spent the year amassing fame and glory. The company capped off 2015 with the announcement of an $80 million investment fund to back companies that build on its platform.

In other words, Slack has so much cash it is now spawning its own startups. It’s the perfect example of a saying venture investors like to repeat: When the bubble bursts, there will be “haves” and “have-nots.”

Becoming a unicorn, it turns out, was the easy part.

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