What a week. Democracy is still standing and the nation is getting back to work, so let’s press forward, even if it does feel surreal to cover business news after witnessing a live-streamed coup attempt.
Setting aside the tectonic political moment, there’s plenty of activity inside the world of startups we need to discuss.
The pace at which new unicorns are being announced feels incredibly rapid, possibly implying that private-market investors anticipate exit valuations will remain high, and that a venture market that tilted late-stage will continue its bias in this new year.
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Regular readers will recall that as 2020 wrapped up, we noted that “new unicorn formation continue[d] to impress.” That late-2020 trend is becoming a 2021 narrative.
For context, 17 unicorns were minted in the United States during Q3 2020. We don’t have Q4 numbers yet, but should inside the next week or so. There were more than 200 unexited unicorns in the United States as the fourth quarter kicked off last year.
We’re at four new domestic unicorns in the first week of Q1 2020, along with at least one more from other shores.
Keep in mind that announcement of private-market rounds lag their actual closing, so the deals we’re discussing were likely closed in Q4 2020, not Q1 2021.
Which startups reached the $1 billion threshold required to earn the unicorn tag? The list is long, but Divvy, Hinge Health, Salesloft, Starburst Data and Mambu seem to fit the bill. Lacework and iboss are possibles, along with Ikena Oncology and Senti Biosciences.
Let’s take a look at the rounds to see if we can spot any correlations amidst the data.
New-nicorns
Divvy raised earlier this week, putting together a $165 million round that valued the Utah-based company at $1.6 billion. That was up more than twice its preceding private valuation of around $700 million.
Utah’s track record as a unicorn nursery implies that it has become a mature technology hub: Divvy follows Podium, which became a unicorn in 2020, and other preceding successes like Qualtrics in coming up from the Silicon Slopes.
Moving along, TechCrunch broke news about Hinge Health’s latest round, which we reported would land around $300 million at a $3 billion valuation. The final numbers were $310 million and a $3 billion post-money valuation.
According to PitchBook data, Hinge Health was worth just $406 million earlier this year during its April 2020 round. How the company managed to generate that much value in such a short period of time is a good question.
What is Hinge Health? As our own Steve O’Hear wrote in his scoop, it’s a “San Francisco-based company that offers a digital solution to treat chronic musculoskeletal (MSK) conditions.” That’s actually pretty cool.
Moving back to the software world, Salesloft is a unicorn now. The sales-enablement firm doubled its post-money valuation from $555 million in 2019 to $1.1 billion this week, again leaning on PitchBook data.
In a post discussing the $100 million investment that vaulted the Atlanta-based company into unicorn status, it wrote that it has “more than doubled recurring revenue” since its preceding funding round. Not bad!
Sticking to the software world, Starburst Data is up next. A few things about this round matter. First, that the startup is now worth $1.2 billion after raising $100 million in a single round. It had only raised a little over $63 million before this new funding event.
And second, according to PitchBook data, the enterprise software startup was worth just $351.25 million after its June 2020 round. Again, we’re seeing rapid value accretion amidst our new unicorns. Indeed, seeing the Divvy valuation double in over a year’s time feels rather modest compared to what some of its new-nicorn peers have managed.
Who else? Mambu. TechCrunch wrote earlier this week that Mambu provides back-end tech to other companies that want to add “a new product like a credit line or a deposit or current account” without building it from the ground up. Powering other fintech companies is a growing business, as we’ve seen in recent rounds.
The company, based in Berlin, raised around $135 million this week, valuing its business at just over $2 billion. PitchBook reports that its most recent private valuation before its most-recent funding event valued Mambu at around $181 million. So, again, we’re seeing valuations multiply amongst the newest unicorns.
Who else?
From here we get into the maybes and the possibles.
Lacework, for example, which raised $525 million at a valuation of more $1 billion this week. However, as we don’t know the value it last raised money at, it’s hard to be sure that it is a new unicorn, though the quickly growing cloud security startup now certainly meets the valuation requirement.
There are other names, such as Ikena Oncology and Senti Biosciences, both of which raised nine-figure rounds this week, to pick out a few. We lack sufficient data to be sure that they have now reached the $1 billion valuation mark, but if we do mental math they certainly could have. Heck, we could even toss iboss — which also raised nine-figures recently — into the mix.
Got all that? I don’t either. But this is the pace at which we’re seeing private market valuations rise and unicorns created, in 2021. And as I wrote this to you, the Nasdaq Composite just reached a new all-time high. Weird year.