Unicorns, Dead, Alive and Valuation Problems

Unicorns, Dead, Alive and Valuation Problems
It’s not that difficult to kill a unicorn…

Trading Unicorns

Unicorns are a little off topic for Spread Bet Magazine given that you can’t normally spread bet on them. However:
  1. It’s interesting, and useful, to look at a variety of investment markets.

  2. It’s also useful to understand that there are many different ways of valuing a company, it doesn’t matter if you disagree with the valuation, if everyone else is trading in a certain direction that will carry the market irrespective of your view of the fundamentals.

  3. There are a few Unicorns that have gone public and it’s handy to have a view on them should you want to trade them when they do IPO (see below for more).

What is a Unicorn?

A Unicorn is a private start-up valued at more than US$1bn, it’s normally focussed on the software or tech sector.

Just to confirm, “private” means it’s not “public”, i.e. it’s not listed on the stock market.

A “Decacorn” is occasionally used to describe a Unicorn with a valuation of +US$10bn.

A “Hectocorn” is occasionally used to describe a Unicorn with a valuation of +US$100bn.

Having said that, I get the feeling the last two terms are even more made up than a mythical winged horse.

Unicorn Valuations Problems

Unicorns often have rough IPOs. The very high valuations often hurt investors who buy into the comedy valuations.

According to a report by SharesPost, 30% of the 90 US Unicorns will either go public, or get acquired, at a lower valuation.

Unicorn Timeline

  • arrow_forward2013 – the term “unicorn” entered Silicon Valley lexicon. There were 39 unicorns and they had a combined value of $100bn
  • arrow_forward2016 – there were about 170 unicorns globally with a combined value of more than $600bn
  • arrow_forward2016 – 19 companies achieved the fabled +$1bn status, down from 2015 but not far off 2014 levels
  • arrow_forward2017 – there were about 203 unicorns globally, they had a combined value of more than $700bn

List of Famous Unicorns That Have IPO’d

Company Exit Date Country Industry Round Exit Valuation ($bn) Total Raised Before Exit ($m)
Blue Apron 29-Jun-2017 USA Internet IPO $1.90 $257
Snap 2-Mar-2017 USA Mobile & Telecommunications IPO $24.80 $2,614
Skyscanner 23-Nov-2016 UK Internet Acquired $1.74 $197
Fitbit 18-Jun-2015 USA Consumer Products & Services IPO $4.10 $66
Etsy 16-Apr-2015 USA Internet IPO $1.78 $95
Alibaba Group 19-Sep-2014 China Internet IPO $167.60 $82
GoPro 26-Jun-2014 USA Consumer Products & Services IPO $3.10 $288
Markit 19-Jun-2014 UK Business Products & Services IPO $4.30 $750
Just Eat 3-Apr-2014 UK Internet IPO $2.44 $129
King Digital Entertainment 26-Mar-2014 Ireland Internet IPO $7.09 $46
Oculus VR 25-Mar-2014 USA Software (non-internet/mobile) Acquired $2.00 $93
WhatsApp 19-Feb-2014 USA Mobile & Telecommunications Acquired $22.00 $60
Twitter 7-Nov-2013 USA Internet IPO $14.16 $760
Tumblr 20-Jun-2013 USA Internet Acquired $1.10 $125
Workday 12-Oct-2012 USA Internet IPO $4.50 $196
Instagram 8-Sep-2012 USA Mobile & Telecommunications Acquired $1.00 $58
Facebook 18-May-2012 USA Internet IPO $104.20 $2,526
Zynga 16-Dec-2011 USA Internet IPO $7.00 $1,848
Groupon 4-Nov-2011 USA Internet IPO $12.71 $1,143
Yandex 25-May-2011 Russia Internet IPO $1.30 $5
LinkedIn 19-May-2011 USA Internet IPO $4.25 $103
PaddyPower 22-Oct-2010 UK Internet IPO $2.00 N/A
Tesla 29-Jun-2010 USA Automotive & Transportation IPO $1.58 $268
Zappos 20-Jul-2009 USA Internet Acquired $1.41 $17

How to Kill a Unicorn

  1. Get a “correct valuation”. Unicorns are all about large valuations that are based on “potential”, “future growth”, “future revenues” etc. The prime reason for the death of a unicorn is that the realistic user growth rate and the realistic revenue growth rate become known. Once that happens it’s difficult to value the firm on “huge growth potential”…

    When this happens people soon start looking at the inevitably large cost base… and then the wings soon stop working.

  2. Take the company public

  3. Sell it to another firm. Note, the new firm doesn’t always need billions.

Is a Dead Unicorn a Bad Thing?

Just because a firm is valued at $100m and is not a unicorn that doesn’t mean it’s a complete failure either.

I think most of us would be happy to own a small piece of a $100m firm.

Of course, if the same firm was valued at $2bn then someone’s probably lost quite a bit of cash.

Dead Unicorn: Ve Interactive Sold for £2m

America has the most unicorns but any unicorns can die.

Ve Interactive, a UK based advertising tech business once valued at £1.5bn was bought out of administration and sold for £2m in May 2017.

The failure was pretty simple. Revenues grew much slower than expected and the firm had problems paying staff and debts.

For more details see Former Unicorn sold for £2m.

More Tech Unicorn Stories

List of All Unicorns – July 2017

The following is according to cbinsights.com and includes ‘whisper valuations’.
  • arrow_forwardTotal number of unicorns globally: 203
  • arrow_forwardCumulative unicorn valuation: $707bn
Unicorn Valuation ($bn) Date Joined Country Industry
Uber $68 23-Aug-2013 USA On-Demand
Didi Chuxing $50 31-Dec-2014 China On-Demand
Xiaomi $46 21-Dec-2011 China Hardware
Airbnb $29.30 26-Jul-2011 USA eCommerce/Marketplace
Palantir Technologies $20 5-May-2011 USA Big Data
Lu.com $18.50 26-Dec-2014 China Fintech
China Internet Plus Holding $18 22-Dec-2015 China eCommerce/Marketplace
WeWork $16.90 3-Feb-2014 USA Facilities
Pinterest $12.30 19-May-2012 USA Social
SpaceX $12 1-Dec-2012 USA Other Transportation
Flipkart $11.60 6-Aug-2012 India eCommerce/Marketplace
Toutiao $11 7-Apr-2017 China Digital Media
Dropbox $10 5-Oct-2011 USA Internet Software & Services
Infor $10 16-Nov-2016 USA Internet Software & Services
DJI Innovations $10 6-May-2015 China Hardware
Stripe $9.20 23-Jan-2014 USA Fintech
Spotify $8.53 17-Jun-2011 Sweden Internet Software & Services
Zhong An Insurance $8 11-Jun-2015 China Fintech
Snapdeal $7 21-May-2014 India eCommerce/Marketplace
Lyft $6.90 12-Mar-2015 USA On-Demand
Lianjia $6.20 8-Apr-2016 China eCommerce/Marketplace
Global Switch $6.02 22-Dec-2016 UK Hardware & Services
One97 Communications (operates Paytm) $5.70 12-May-2015 India Fintech
Vice Media $5.70 17-Aug-2013 USA Media
Intarcia Therapeutics $5.50 1-Apr-2014 USA Healthcare
Ele.me $5.50 28-Aug-2015 China On-Demand
Outcome Health $5 31-May-2017 USA Healthcare
Coupang $5 28-May-2014 South Korea eCommerce/Marketplace
Meizu Technology $4.58 23-Jul-2014 China Hardware
Magic Leap $4.50 21-Oct-2014 USA VR/AR
Yello Mobile $4 11-Nov-2014 South Korea Mobile Software & Services
Houzz $4 30-Sep-2014 USA eCommerce/Marketplace
Social Finance $4 3-Feb-2015 USA Fintech
Slack Technologies $3.80 31-Oct-2014 USA Internet Software & Services
Garena $3.75 15-Mar-2015 Singapore Mobile Software & Services
Tanium $3.75 31-Mar-2015 USA Cybersecurity
Olacabs $3.65 27-Oct-2014 India On-demand
Otto Bock HealthCare $3.50 24-Jun-2017 Germany Healthcare
Credit Karma $3.50 29-Sep-2014 USA Fintech
Instacart $3.40 30-Dec-2014 USA On-Demand
Fanatics $3.10 6-Jun-2012 USA eCommerce/Marketplace
Kuaishou $3 1-Jan-2015 China Social
Royole Corporation $3 4-Nov-2016 China Hardware
VANCL $3 14-Dec-2010 China eCommerce/Marketplace
DocuSign $3 4-Mar-2014 USA Internet Software & Services
GrabTaxi $3 4-Dec-2014 Singapore On-Demand
Moderna $3 19-Dec-2014 USA Healthcare
Mobike $3 16-Jun-2017 China On-Demand
ContextLogic (dba. Wish) $3 18-May-2015 USA eCommerce/Marketplace
NIO $2.89 15-Mar-2017 China AutoTech
Auto1 Group $2.80 3-Aug-2015 Germany eCommerce/Marketplace
Oscar Health Insurance Co. $2.70 20-Apr-2015 USA Healthcare
Bloom Energy $2.70 6-Mar-2009 USA Greentech
Unity Technologies $2.60 13-Jul-2016 USA Gaming
Qualtrics $2.50 24-Sep-2014 USA Big Data
Mozido $2.39 22-Oct-2014 USA Fin Tech
Adyen $2.30 16-Dec-2014 Netherlands Fintech
Klarna $2.25 12-Dec-2011 Sweden Fintech
Hellofresh $2.09 17-Sep-2015 Germany eCommerce/Marketplace
ReNew Power Ventures $2 14-Feb-2017 India Energy & Utilities
Huimin $2 5-Sep-2016 China On-Demand
Zenefits $2 6-May-2015 USA Fintech
Greensky $2 22-Oct-2015 USA Fintech
Avant $2 30-Sep-2015 USA Fintech
Github $2 30-Jul-2015 USA Internet Software & Services
Domo Technologies $2 8-Apr-2015 USA Big Data
Trendy Group International $2 13-Feb-2012 China Clothing & Accessories
Weiying $2 17-Nov-2015 China eCommerce/Marketplace
Uptake $2 27-Oct-2015 USA Big Data
Prosper Marketplace $1.90 8-Apr-2015 USA Fintech
Go-Jek $1.80 4-Aug-2016 Indonesia On-Demand
Quora $1.80 21-Apr-2017 USA Internet Software & Services
Zocdoc $1.80 20-Aug-2015 USA Healthcare
Sprinklr $1.80 31-Mar-2015 USA Internet Software & Services
CJ Games $1.79 26-Mar-2014 South Korea Gaming
The Honest Company $1.70 13-Aug-2015 USA eCommerce/Marketplace
Buzzfeed $1.70 18-Aug-2015 USA Media
CureVac $1.65 5-Mar-2015 Germany Healthcare
MongoDB $1.60 4-Oct-2013 USA Big Data
Afiniti $1.60 14-Apr-2017 USA Internet Software & Services
BlaBlaCar $1.60 16-Sep-2015 France On-Demand
LaKala $1.60 23-Jun-2015 China Fintech
Quanergy Systems $1.59 24-Aug-2016 USA Auto Tech
Promasidor Holdings $1.58 8-Nov-2016 South Africa Food and Beverage
Zoox $1.55 27-May-2016 USA Auto Tech
Oxford Nanopore Technologies $1.55 21-Jul-2015 UK Healthcare
Pindouduo $1.50 20-Jul-2016 China eCommerce
Insidesales.com $1.50 28-Apr-2014 USA Big Data
Mu Sigma $1.50 7-Feb-2013 USA Big Data
STX Entertainment $1.50 10-Aug-2016 USA Entertainment
GuaHao $1.50 22-Sep-2015 China Healthcare
Farfetch $1.50 4-Mar-2015 UK eCommerce/Marketplace
Razer $1.50 15-Oct-2014 USA Hardware
JetSmarter $1.50 12-Dec-2016 USA TravelTech
ironSource $1.50 11-Aug-2014 Israel Mobile Software & Services
Tuandaiwang $1.46 30-May-2017 China Fintech
Koudai Gouwu $1.40 23-Oct-2014 China eCommerce/Marketplace
AvidXchange $1.40 8-Jun-2017 USA Fintech
Hike $1.40 16-Aug-2016 India Social
C3 IoT $1.40 2-Mar-2017 USA IoT
DraftKings $1.35 26-Jul-2015 USA Internet Software & Services
Rubrik $1.30 28-Apr-2017 USA Internet Software & Services
Zeta Interactive $1.30 15-Jul-2015 USA Internet Software & Services
Apttus $1.30 1-Sep-2015 USA Internet Software & Services
Robinhood $1.30 26-Apr-2017 USA Fintech
URWork $1.30 18-Jan-2017 China Real Estate
Peloton Interactive $1.30 24-May-2017 USA Fitness
Thumbtack $1.20 29-Sep-2015 USA eCommerce/Marketplace
Ten-X $1.20 5-Mar-2014 USA Internet Software & Services
Clover Health $1.20 10-May-2017 USA Healthcare
Flatiron Health $1.20 6-Jan-2016 USA Healthcare
Appnexus $1.20 18-Aug-2014 USA Adtech
Warby Parker $1.20 30-Apr-2015 USA eCommerce/Marketplace
Human Longevity $1.20 5-Apr-2016 USA Healthcare
Infinidat $1.20 29-Apr-2015 Israel Hardware
OfferUp $1.20 8-Sep-2016 USA eCommerce/Marketplace
Careem Networks $1.20 18-Dec-2016 United Arab Emirates On Demand
Automattic $1.16 27-May-2013 USA Internet Software & Services
NetEase Cloud Music $1.16 11-Apr-2017 China Internet Software & Services
LIfeMiles $1.15 13-Jul-2015 Colombia Business Products & Services
BrewDog $1.15 10-Apr-2017 UK Food & Beverages
Global Fashion Group $1.10 8-Apr-2015 Luxembourg eCommerce/Marketplace
Shopclues $1.10 12-Jan-2016 India eCommerce/Marketplace
Proteus Digital Health $1.10 2-Jun-2014 USA Healthcare
Actifio $1.10 24-Mar-2014 USA Big Data
TangoMe $1.10 20-Mar-2014 USA Social
Nextdoor $1.10 4-Mar-2015 USA Social
TransferWise $1.10 26-Jan-2015 UK Fintech
23andMe $1.10 3-Jul-2015 USA Healthcare
OVH $1.10 3-Jul-2015 France Big Data
Anaplan $1.09 14-Jan-2016 USA Internet Software & Services
Jiuxian $1.05 30-Jul-2015 China eCommerce/Marketplace
Africa Internet Group $1.04 8-Feb-2016 Nigeria eCommerce/Marketplace
AppDirect $1.04 7-Oct-2015 USA Internet Software & Services
Kendra Scott Jewelry $1 21-Dec-2016 USA Clothing and Accessories
Avaloq Group $1.01 22-Mar-2017 Switzerland Fintech
Huochebang $1 22-Dec-2016 China Supply Chain & Logistics
Katerra $1 13-Apr-2017 USA Construction Tech
Yuanfudao $1 31-May-2017 China Edtech
OpenDoor Labs $1 30-Nov-2016 USA Real Estate
Pluralsight $1 13-Dec-2016 USA EdTech
Liepin $1 28-Jun-2016 China HR & Workforce Management
Yixia $1 24-Nov-2015 China Social
Medallia $1 21-Jul-2015 USA Internet Software & Services
Shazam $1 20-Jan-2015 UK Mobile Software & Services
Apus Group $1 16-Jan-2015 China Mobile Software & Services
Docker $1 14-Apr-2015 USA Internet Software & Services
CloudFlare $1 1-Dec-2012 USA Cybersecurity
Procore Technologies $1 8-Dec-2016 USA Construction Tech
Lookout $1 13-Aug-2014 USA Cybersecurity
Funding Circle $1 23-Apr-2015 UK Fintech
Tujia $1 17-Jun-2015 China eCommerce/Marketplace
Fanli $1 20-Apr-2015 China eCommerce/Marketplace
Zomato Media $1 10-Apr-2015 India Social
JustFab $1 29-Aug-2014 USA eCommerce/Marketplace
Mogujie $1 6-Jun-2014 China Social
Illumio $1 14-Apr-2014 USA Cybersecurity
BeiBei $1 22-Jan-2015 China eCommerce/Marketplace
Panshi $1 5-May-2015 China Adtech
InMobi $1 2-Dec-2014 India Adtech
CrowdStrike $1 17-May-2017 USA Cybersecurity
AVAST Software $1 5-Feb-2014 Czech Republic Cybersecurity
MarkLogic $1 12-May-2015 USA Big Data
Fanduel $1 14-Jul-2015 USA Internet Software & Services
Zhaogang $1 3-Jul-2017 China eCommerce/Marketplace
Vox Media $1 12-Aug-2015 USA Media
Kik Interactive $1 18-Aug-2015 Canada Social
Decolar $1 10-Mar-2015 Argentina TravelTech
Carbon3D $1 20-Aug-2015 USA Hardware
Kabbage $1 14-Oct-2015 USA Fintech
Datto $1 17-Nov-2015 USA Internet Software & Services
iTutorGroup $1 18-Nov-2015 China Ed Tech
Gusto $1 18-Dec-2015 USA Fintech
Zhangyue $1 4-Jan-2016 China Hardware
Dt Dream $1 8-Jun-2017 China Internet Software & Services
Dada $1 31-Dec-2015 China eCommerce
Rong360 $1 12-Oct-2015 China Fintech
MindMaze $1 17-Feb-2016 Switzerland VR/AR
Mercari $1 2-Mar-2016 Japan eCommerce/Marketplace
Mia.com $1 8-Sep-2015 China eCommerce/Marketplace
Xiaohongshu $1 31-Mar-2016 China eCommerce/Marketplace
iCarbonX $1 12-Apr-2016 China Healthcare
Symphony Communication Services Holdings $1 16-May-2017 USA Fintech
Age of Learning $1 3-May-2016 USA Edtech
Glassdoor $1 3-Jun-2016 USA Internet Software & Services
Quikr $1 7-Apr-2015 India eCommerce/Marketplace
SMS Assist $1 13-Jun-2016 USA Internet Software & Services
benevolent.ai $1 2-Jun-2015 UK Healthcare
Mofang Gongyu $1 13-Apr-2016 China Facilities
UBTECH Robotics $1 26-Jul-2016 China Robotics
Compass $1 31-Aug-2016 USA Real Estate
Adaptive Biotechnologies $1 8-Jan-2015 USA Healthcare
HuJiang $1 29-Oct-2015 China Edtech
Guazi $1 12-Mar-2016 China eCommerce/Marketplace
Zhihu $1 12-Jan-2017 China Internet Software & Services
51Xinyongka $1 21-Sep-2016 China Fintech
Eventbrite $1 13-Mar-2014 USA eCommerce/Marketplace
Cylance $1 8-Jun-2016 USA Cybersecurity
Zscaler $1 3-Aug-2015 USA Cybersecurity
Ofo $1 1-Mar-2017 China On Demand
Rocket Lab $1 21-Mar-2017 US SpaceTech
Improbable $1 12-May-2017 UK AR/VR
Zoom Communications $1 17-Jan-2017 USA Internet Software & Services

AuthorAlex Turner

Senior Editor, SpreadBetMagazine

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