There have been more and more unicorn sightings  

With 1401 active tech unicorns as per June 2024, what happens next? 

7th June 2024

Financial data and software company, Pitchbook, has released new research on startup and unicorn growth. 

It finds that there are currently 1401 active unicorns, having raised a total of $797.3 billion in VC capital. Their cumulative valuation stands at $4.4 trillion, signalling a time of sustained and rapid growth in the startup ecosystem. 

The general guidance is that a unicorn is a startup which is valued at $1 billion or more. Pitchbook has its own more precise definition of this term, which includes the startup being venture-backed. 

It found that new unicorns are rapidly emerging across a range of industries and primarily within IT, B2C services and Healthcare. The US is where over half of the unicorns are based, with Asia and Europe in second and third place.   

Some of the most prevalent and well known unicorns include ByteDance, SpaceX and Stripe. New entrants to Club Unicorn include Elon Musk’s xAI, financial advisory software Altruist and Ascend Elements which works within sustainable EV battery manufacturing. 

But is there a bubble? 

There has been a surge in popularity for tech market companies, with some of the household big tech companies now exceeding $3 trillion valuations. Some will argue that hype around AI has fuelled market valuations with comparisons being made to the 1999 Tech Bubble. 

Others will argue that the valuations are deserved given the strong earnings growth exhibited by the companies, and more importantly, the market’s expectations that these companies will continue compounding at strong rates of return, driven by sales and efficiencies garnered from AI. 

Whilst history does not repeat, it does tend to rhyme. Historical trends point to growth rates eventually reverting to mean but timing of market cycles is notoriously difficult and inherently uncertain.

Whether these valuations reach new heights or disappoint investors is yet to be seen, but one thing that appears to get unanimous agreement is that, just like the dawn of the Internet age two decades ago, the AI Age is likely to revolutionise business over the coming decades.

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