Unicorn companies are ‘average’ now…but some things haven’t changed
Technically, statistically, and macroeconomically, the pandemic caused a recession. But for the majority of the venture industry, the pandemic was a steroid shot.
In the most recent sign that frenzy of activity has not abated, Pitchbook reported Tuesday that the average valuation of a U.S.-based late-stage startup grew to $1.03 billion pre-money (which doesn’t account for the most recent round of funding) in the first quarter of 2021—marking the first time that the metric has reached beyond $1 billion in Pitchbook’s records.
That’s right: Unicorn status—an honor founders used to spend years of competitive maneuvering and all-night coding trying to achieve—is quite literally average in 2021.
What made the extraordinary ordinary? Interest rates have remained low through the pandemic, pushing investors toward “riskier” assets with the chance of greater returns, while stay-at-home orders galvanized the tech industry. Non-traditional investors such as hedge funds, in particular, have been happy to pay a premium for a chance at those returns. Rising valuations within the public markets, paired with a factory line of special purpose acquisition companies regularly churning out billion-dollar-plus companies, have also helped push the values of private market companies ever higher.
That heady cocktail of factors has helped companies reach previously unimaginable valuations including payments startup Stripe, which raised $600 million in March at a $95 billion post-money valuation, as well as Instacart, which raised $265 million at a $39 billion valuation.
Buuuuuut there is more nuance in the Pitchbook figures: While the average pre-money valuation has risen above $1 billion, the median figure sits at $112.5 million. While that too is at a record high, the growth of that number has been slower compared to the average. That suggests that while unicorns are being created at a blistering pace, investors are largely still doing what they were doing in the Before Times: piling into the same handful of well-known unicorns and driving up valuations there.
A CRYPTO COMPANY BILLING ITSELF AS ECO-FRIENDLY RAISES FUNDING: Chia Network, a blockchain company with a buzzy crypto of its own, raised $61 million in funding from investors including Richmond Global Ventures and Andreessen Horowitz. The deal values the company at about $500 million, per Bloomberg. Founded by BitTorrent creator Bram Cohen, Chia has risen to prominence by billing itself as an eco-friendly crypto operation at a time when Bitcoin’s carbon footprint has come under question.
- Noom, a New York City-based health and dieting platform, raised $540 million in Series F funding. Silver Lake led the round and was joined by investors including Oak HC/FT, Temasek, and Novo Holdings. Existing investors Sequoia Capital, RRE, and Samsung Ventures also participated.
- FarEye, a Chicago-based delivery management platform, raised $100 million in Series E funding. TCV and Dragoneer Investment Group led the round and were joined by investors including Eight Roads Ventures, Fundamentum and Honeywell.
- Invaio Sciences, a Cambridge, Mass.-based startup focused on agriculture, nutrition and environmental challenges, raised $88.9 million in Series C financing. Flagship Pioneering was joined by Stage 1 Ventures, Bluwave Capital, and Alexandria Venture Investments.
- Tessian, a cybersecurity startup, raised $65 million in Series C funding valuing it at $500 million. March Capital was the lead investor, while other participants included Accel, Balderton Capital, Latitude Venture Partners, Sequoia Capital, and Schroder Adveq.
- Resolve, a San Francisco-based billing company that spun out of Affirm, raised $60 million in funding. Investors in the round include Initialized Capital, KSD Capital, Haystack VC, Commerce Ventures, and Clocktower Ventures.
- Qualio, a San Francisco-based maker of cloud quality management system software for the life sciences companies, raised $50 million in Series B funding. Tiger Global led the round and was joined by investors including Menlo Ventures, Frontline Ventures, MHS Capital, Operator Partners, Sorenson Ventures, and Storm Ventures.
- Stavvy, a Boston-based fintech platform focused on mortgages, raised about $40 million in Series A funding. Morningside Technology Ventures led the round.
- Matera, a Paris-based maker of residential property management software, raised €35 million ($43 million) in Series B funding. Mubadala Capital led the round and was joined by investors including Bpifrance, Burda Principal Investments, Index Ventures and Samaipata.
- Clearing, a New York City-based pain relief startup, raised $20 million in funding. Investors included Bessemer and Founders Fund.
- Voltz, a Brazilian electric motorcycle company, raised 95 million reais ($17.85 million) from Creditas.
- Overture Life, a IVF process automation startup, raised $15 million in Series B funding. Octopus Ventures and Google Ventures invested.
Atlan, an India-founded data collaboration platform, raised $16 million in Series A funding, Insight Partners led the round. Sequoia Surge and Waterbridge Ventures also participated in the round.
- MacroFab, a Houston-based electronics manufacturing startup, raised $15 million in funding. Edison Partners led the round and was joined by investors including ATX Venture Partners and Altium Limited.
- Fireflies.ai, a Pleasanton, Calif.-based maker of a transcription and search platform, raised $14 million. Khosla Ventures led the round.
- GridX, a Milpitas, Calif.-based provider of operations support solutions to utilities and energy suppliers, raised $12 million in Series B funding. Energy Impact Partners led the round.
- Loyal, a San Francisco-based company developing a drug to delay aging in dogs, raised $11 million. Investors included Greg Rosen (Box Group), Laura Deming (The Longevity Fund), First Round Capital (Josh Kopelman), and Collaborative Fund (Taylor Greene).
- Verituity, a McLean, Va.-based digital payments platform, raised $10 million in Series A funding. ForgePoint Capital and Ardent Venture Partners led the round.
- Kula Bio, a Boston-based company focused on sustainable nitrogen fertilizers, raised $10 million in seed funding. Collaborative Fund led the round and was joined by investors including Nature Conservancy, LowercarbonCapital, and the Grantham Environmental Trust’s Neglected Climate Opportunities Fund.
- Leif, a New York City-based outcome-based tuition financing platform, raised $10 million. LL Funds and Insita Group invested.
- Future Family, a San Francisco-based fintech, fertility, and concierge care startup, raised $9 million in Series A-1 funding. Mindset Ventures and OurCrowd led the round.
- AcuityMD, a Lewes, Del.-based platform for commercializing medical devices with data, raised $7 million. Benchmark led the round and was joined by investors including AJAX Health.
- Beacons, a San Francisco-based landing page for creators, raised $6 million in seed funding. Andreessen Horowitz led the round and was joined by investors including Atelier Ventures, The Chainsmokers’ Mantis Fund, Night Media Ventures and LOUDgg.
- Gridware, a Sacramento, Calif.-based power grid startup, raised $5.3 million in seed funding. Priscilla Tyler of True Ventures and Seth Bannon and Shuo Yang of Fifty Year led the round.
- Docbot, an Irvine, Calif.-based A.I. company focused on gastrointestinal disease, raised $4 million in Series A funding. Khosla Ventures led the round and was joined by investors including Bold Capital Partners, Collaborative Fund and Boutique Venture Partners.
- Grain, a San Francisco-based video recording and transcription startup raised $3 million in funding. Freestyle Capital led the round and was joined by investors including Slack Fund, Acrew Capital, and Founder Collective.
- Ever/Body, a New York City-based cosmetic dermatology provider, raised $38 million in equity and debt Series B funding. Tiger Global Management led the round and was joined by investors including Addition, Fifth Wall, MetaProp, and Gaingels. The company says the raise is primarily in equity.
- Bregal Sagemount invested $130 million for a non-controlling interest in Printful, a Charlotte, N.C.-based print-on-demand shipping and fulfillment company. The deal values the business over $1 billion.
- Blackstone invested in Walker Edison, a West Jordan, Ut.-based furniture supplier. Financial terms weren't disclosed. Prospect Hill Growth Partners still backs Walker Edison.
- Orthopedic Care Partners, a portfolio company of Varsity Healthcare Partners, acquired Motion Orthopaedics, a St. Louis, Mo.-based orthopedic practice. Financial terms weren't disclosed.
- Iodine Software acquired Artifact Health, a Boulder, Colo.-based physician engagement platform company. Financial terms weren't disclosed.
- Raymond James Financial announced plans to acquire Cebile Capital, a London- and New York-based private fund placement agent. Financial terms weren't disclosed.
- Sensor Tower, backed by Riverwood Capital, acquired Pathmatics, a Santa Monica, Calif.-based market intelligence company. Financial terms weren't disclosed.
- Trive Capital recapitalized Oscar W. Larson Company, a Clarkston, Mich.-based equipment distributor and provider of installation, testing, inspection, maintenance and repair services. Financial terms weren't disclosed.
- Gryphon Investors agreed to sell portfolio company CORA Health Holdings to H.I.G. Capital. Financial terms weren't disclosed.
- Angeles Equity Partners and Clearlake Capital Group agreed to sell American Construction Source, a lumber and building materials company, to US LBM. Financial terms weren't disclosed.
- Insight Partners is weighing an exit of Ministry Brands, a Lenoir City, Tenn.-based maker of software tailored to faith-based organizations, per PE Hub.
- Invoca agreed to acquire DialogTech, a Chicago-based marketing platform focused on voice. SSM Partners and Apex Venture Partners back DialogTech. Financial terms weren't disclosed.
- Vonovia SE acquired Deutsche Wohnen SE, a Germany-based rival residential property firm, for 19 billion euros ($23 billion).
- Martin Marietta Materials agreed to acquire HeidelbergCement AG’s assets in California and Arizona for $2.3 billion. Those assets include quarries and cement plants.
- Singular Genomics Systems, a La Jolle, Calif.-based maker of sequencing technology, plans to raise $179 million in an offering of 8.5 million shares priced between $20 to $22. Deerfield backs the firm.
- Day One Biopharmaceuticals, a South San Francisco-based biopharmaceutical company focused on genetic cancers, plans to raise $126 million via an offering of 8.4 million shares priced between $14 to $16. Access Industries, Atlas Venture Fund, and Canaan Partners back the firm.
- DLocal Limited, a Uruguay-based payments platform, now plans to raise $500 million in an offering of 29.4 million shares (85% insider sold) at a price range of $16 to $18. Fidelity plans to acquire 20% of those shares.
- Better Choice, a Tampa, Fla.-based maker of pet food and other pet products, filed to raise $50 million.
- Ebanx SA, a Brazil-based unicorn startup, is gearing up for a U.S. listing, per Bloomberg. FTV Capital backs the firm.
- Adams Street Partners, a Chicago-based private markets investment management firm, named Yohan Hill as Director of ESG and Responsible Investing.
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