Sometime in August, my editor and I became interested in a question that turned out to be less controversial than expected: Will we ever see trillion-dollar startups?
I’ve now asked dozens of people this question and the answer, almost unanimously, has been some version of “Yes, look at OpenAI’s $500 billion valuation.”
It’s a remarkable state of affairs when you consider that as recently as August 2018, the planet’s most valuable startup was Uber, with a measly $76 billion valuation, and there were exactly zero public companies with trillion-dollar market caps. Apple was the first to grab the trillion-dollar ring in August 2018 (on Tuesday, the iPhone maker’s market cap reached $4 trillion), and Meta, Nvidia, Microsoft, Alphabet, and Tesla have since followed suit.
So, assuming a trillion-dollar privately-held startup really is just a matter of time, there are a number of questions that we probably need to start asking, including what it means for the exit-based VC model and for founders, what it means for public-company focused regulation and disclosure rules (especially given efforts to open retirement plans to private assets), and of course, what the heck do we even call these things?
Calling a company that large a startup is, of course, a bit of a misnomer, as Bessemer partner Talia Goldberg points out: “Calling a trillion dollar company a ‘startup’ is an exercise in branding,” she said via email. “It is a way for founders to keep the innovation narrative.” Goldberg also adds that the total valuation of the companies on Bessemer’s Cloud 100 list has grown by 10x over the last decade. Soon, she says, “the average private valuation will be $112 billion.”
It does beg the question: 12 years after Aileen Lee coined the term to describe billion-dollar companies, what does “unicorn” even mean anymore? $1 billion startups are a dime a dozen these days. What’s needed is a term for the most rarefied breed, which, if the Term Sheet readers I’ve talked to are right, will soon be measured in thirteen digits.
Samir Kumar, Touring Capital general partner, suggests the name “triceratops.”
“If you think of triceratops you think of an unstoppable creature and brute force,” Kumar said via email. “Kind of like how trillion-dollar valuation startups will be created. Triceratops also went extinct.”
Costonoa Ventures partner John Cowgill offers up “gigacorn,” while Felicis founder and managing partner Aydin Senkut likes “terracaps.”
“‘Terra’ for trillion,” Senkut said. “It’s the next logical jump after unicorns and decacorns. At that scale, ‘startup’ doesn’t cut it. A terracap isn’t really a startup. It’s a sovereign economy with a cap table.”
My personal submission, for anyone wondering, is dragon. But perhaps my favorite suggestion:
“At a trillion dollars, we’re going to have to call them Kaiju-corns!” Antonio Rodriguez, Matrix managing partner, said via email. “Because like the fabled monsters from the center of the Earth, they are big and strong and stomping all over the rest of the startup ecosystem.”
There is, of course, an exit challenge if and when we finally see these Kaiju-corns, likely bolstering incentives to stay private in perpetuity.
“If you’re investing in a startup worth a trillion dollars, what exit are you underwriting to? How is there any other exit besides going public?” wonders Touring’s Kumar. “And how many trillion-dollar startups will be able to put up the numbers to justify that valuation in the public markets? None of this is remotely close to being reasonable. Besides going public, probably the more realistic path is staying private (like SpaceX), and doing secondaries and tender offers to create liquidity for founders and early investors. That’s another very real path.”
The few hundred words I’ve dropped on this aside, Sunil Dhaliwal, Amplify Partners GP, makes an important point: Anything that gets that big is definitionally anomalous.
“We should give the unicorn metaphor a rest,” said Dhaliwal via email. “It served its purpose, but saying decacorn, centicorn, or kilocorn (is that what’s next?) has become meaningless. I’m not going to try to make fetch happen by coming up with a new catchy moniker. I think the bigger point is that while a few companies might reach this level, this is definitely not a category of companies anytime soon.”
Then again, investor enthusiasm for private companies, particularly of the AI variety, does not seem to be slowing down.
“The biggest delta we’ve ever seen now exists between private and public growth,” said Senkut via email. “The best private companies are growing at 400%, while the best publics struggle to hit 20%. Capital is going to go where the growth is. And right now, that’s private markets.”
Term Sheet Podcast… This week’s guest: Oura CEO Tom Hale! Oura has been making headlines for months, most recently with its massive $900 million funding round, valuing the wearables giant at $11 billion. In September, while at Brainstorm Tech, I sat down with Oura CEO Tom Hale to talk about the company’s growth, data privacy, the biggest challenge he’s faced as CEO, the unexpected places he’s unlocked consumer value, and more. Listen and watch here.
See you tomorrow,
Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@fortune.com
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Venture Deals
- Uniphore, a Palo Alto, Calif.-based business AI platform, raised $260 million in Series F funding from NVIDIA, AMD, Snowflake, Databricks, and others.
- Moniepoint, a Lagos, Nigeria-based financial platform, raised $200 million in Series C funding. Development Partners led the round and was joined by LeapFrog Investments, Lightrock, Alder Tree Investments, and others.
- LangChain, a San Francisco-based agent engineering platform, raised $125 million in funding. IVP led the round and was joined by CapitalG, Sapphire Ventures, and existing investors.
- Seneca, a San Francisco-based firefighting technology company, raised $60 million in funding. Caffeinated Capital and Convective Capital led the round and were joined by First Round Capital, Transition VC, Advance Venture Partners, and others.
- UnifyApps, a New York City-based developer of enterprise AI operating systems, raised $50 million in Series B funding. WestBridge Capital led the round and was joined by ICONIQ and others.
- Serval, a San Francisco-based AI-powered IT service management platform, raised $47 million in Series A funding. Repoint Ventures led the round and was joined by First Round Capital, General Catalyst, Box Group, and others.
- Hyro, a New York City-based developer of conversational AI for health care, raised $45 million in funding. Healthier Capital led the round and was joined by Norwest, Define Ventures, and existing investors.
- Keycard, a San Francisco-based platform for building and deploying AI agents, raised $38 million across seed and Series A rounds. Andreessen Horowitz and boldstart ventures led the $8 million seed round and Acrew Capital led the $30 million Series A round.
- Faeth Therapeutics, a San Francisco-based biotechnology company developing therapies designed to target tumor metabolism, raised $25 million in funding. S2G Ventures led the round and was joined by Khosla Ventures, Future Ventures, Digitalis Ventures, and others.
- ChipAgents, a Goleta, Calif.-based agentic AI chip design platform, raised $21 million in Series A funding. Bessemer Venture Partners led the round and was joined by others.
- Estuary, a New York City-based data movement and streaming platform, raised $17 million in Series A funding. M13 led the round and was joined by Firstmark and Operator Partners.
- Streetbeat, a Palo Alto, Calif.-based AI-powered intelligence platform designed for financial professionals and retail investors, raised $15 million in Series A funding. CDP Venture Capital led the round and was joined by TTV Capital, P101, Monte Carlo Capital, 3Lines, and others.
- Bronto, a Dublin, Ireland-based log data platform company, raised $14 million in seed funding. Cercano Management led the round and was joined by Heavybit and Conviction Capital.
- Acelab, a Brooklyn, N.Y.-based AI-powered platform designed to help architects choose building materials, raised $13.5 million in Series A funding. Navitas Capital led the round and was joined by JLL Spark, Divco West, and others.
- Sizable Energy, a Milan, Italy-based ocean energy storage company, raised $8 million. Playground Global led the round.
- Anchor Browser, a Tel Aviv, Israel and New York City-based developer of a cloud browser for AI agents, raised $6 million in seed funding. Blumberg Capital led the round and was joined by Gradient.
- MythWorx, a Dallas, Texas-based AI model company, raised $5 million in seed funding. Eagle Venture Fund IV and Eagle Freedom Fund II led the round and were joined by angel investors.
- Luster, an Indianapolis, Ind.-based AI-powered platform designed to help customer-facing teams prevent mistakes, raised $3 million in seed funding. High Alpha and Ivy Ventures led the round and were joined by others.
- Piere, a New York City-based AI-powered financial automation platform, raised $2.1 million in pre-seed funding. Grand Ventures led the round and was joined by Selah Ventures, Trustage Ventures, Samvid Ventures, and Fabric VC.
Private Equity
- Machinify, a portfolio company of New Mountain Capital, took Performant Healthcare, a New York City-based health care analytics company, private for approximately $670 million.
- Mainsail Partners invested $54 million in CourtReserve, a St. Augustine, Fla.-based developer of booking, membership management, and other software for racket and paddle sports.
- An affiliate of H.I.G. Capital acquired a majority stake in A.L.A., a Naples, Italy-based logistics and distribution services provider to aerospace and defense manufacturers. Financial terms were not disclosed.
- Caylent, backed by Gryphon Investors, acquired Trek10, a South Bend, Ind.-based Amazon Web Services partner. Financial terms were not disclosed.
- Industrial Control Solutions, a portfolio company of LDR Partners, acquired Duro-Sense Corporation, a Carson, Calif.-based designer and manufacturer of temperature sensors and assemblies. Financial terms were not disclosed.
- One Equity Partners acquired a majority stake in Digital Value, a Rome, Italy-based provider of data, AI, cloud computing, and other tech-based solutions. Financial terms were not disclosed.