Unicorn births fell 89% from their peak in the first quarter, the worst result since the third quarter of 2017
Investors are gone beating nearly two unicorns a day. In fact, we barely have more than one new mythical horned horse a week.
Welcome to the new venture normal, where it seems stories of formerly well-funded startups that imploded will be more common than news about mega rounds.
Tracking the global venture slowdown is a twofold task: first, you need to track the slowing flow of venture dollars to startups, and second, it involves valuations shrinking while pre- and post-money valuations wilt under tighter investment conditions .
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Declining valuations at large and small technology companies and the lack of capital combine to create a parched start-up landscape. From early-stage falling valuations to late-stage investments And valuations are decimated, it’s hard for startups.
PitchBook data regarding new unicorns underlines how bad it is now: a skinny 18 unicorns were minted in Q1 2023, compared to 163 new unicorns in both Q3 and Q4 2021.
The last time we saw the number of new unicorns this low was in the third quarter of 2017.
To put this in clearer context, in the first quarter of 2023, new unicorns were created at a rate only marginally better than the average quarterly figure in 2016. You know, the last year of the second Obama administration.
Another era, in other words.
How did we get here? Late stage rounds got smaller, but it wasn’t just that. Investors finally realized how misjudged late-stage value creation during the recent venture peak.
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