Bloomberg recently reported that out of 128 tech unicorns (those with valuations above $1 billion), nearly 90% were estimated to be valued lower in private trades. Citing Forge Global, they noted that about a third had valuations that had dropped below $1 billion, meaning they are no longer even considered unicorns.
Out of 128 closely held companies that achieved valuations at or above $1 billion as of 2021, nearly 90% were estimated to be valued lower in private trades, according to Forge Global, an alternative trading venue operator. About a third of the startups’ valuations in the group tracked by Forge dropped below $1 billion — the threshold to be considered a unicorn.
“One of the big fear-of-missing-out effects is institutional investors afraid the IPO window is going to reopen, and they won’t be in private” companies beforehand, said Forge Global Holdings Inc.Chief Executive Officer Kelly Rodriques. “We’re in that moment now.”
Buyers and sellers are coming to a consensus on startup valuations, which is the first step to jump-starting the late-stage market.
Forge Global CEO Kelly Rodriques joins ‘The Exchange’ to discuss growing momentum in the IPO market, secondary markets for investment into private companies, and late-stage private market valuations.
Data from Forge’s November 2022 report indicates that startups that raised earlier in the present downturn wound up collecting fewer down rounds and received better overall pricing than their more reticent brethren.