Unicorn startups lost almost $100 billion this year

The Future. March 2022 was heaven for startups, with unicorns (startups valued over $1 billion) achieving a total worth of $190 billion. But now that crypto’s in deep trouble and the global economy approaches a recession, $96 billion of that has been wiped out — and steeper losses may still be on the way.

Doesn’t add up
Forbes re-evaluated these unicorns’ net worth to come up with more realistic numbers.

• Since companies are disincentivized to give brutally honest answers about their own valuations, Forbes made new estimates by consulting three private market pricing data providers and averaging all of their valuations for a given company.
• Some unicorns — like Stripe, Instacart, and Checkout.com — preemptively slashed their own valuations (sometimes by up to 70%) to avoid a crisis of investor confidence. Forbes took these new estimates at face value.
• Finally, a few companies that ran out of cash have had to complete “down rounds” of fundraising that exposed them to reevaluation by the market. In Klarna’s case, that meant knocking their valuation from $45.6 billion down to $6.7 billion in July 2022.
• The data suggests that outside China, there are now 32 unicorn billionaires worth $94 billion, down from 44 billionaires worth $190 billion last year.

This data excludes Chinese billionaires whose involvement with the Chinese government makes their wealth hard to measure.

The bigger they are…
To avoid more “down rounds,” many struggling tech companies are instituting widespread layoffs, including Scale AI, Gemini, Brex, and others. But that’s likely only a stopgap solution for many firms, whose valuations were unjustifiably high during the tech boom.

Money runs out, and when it does, there will most likely be more down rounds… And the unicorn herd will continue to thin.