| SAN FRANCISCO, June 1
SAN FRANCISCO, June 1 The total valuation of
late-stage, venture-backed private companies in the United
States and Europe has exploded from a few dozen startups worth a
collective $40 billion in 2010 to hundreds of firms that
together are now worth almost $500 billion, according to a
report released Thursday.
The numbers show the magnitude of the recent trend in which
the biggest Silicon Valley startups raise hundreds of millions
or even billions of dollars from hedge funds, mutual funds and
other private investors while delaying their entrance into
There are now 471 late-stage private companies - defined as
firms that have raised at least $75 million through at least
three rounds of financing - with an approximate valuation of
$490 billion, according to the report from Scenic Advisement, a
San Francisco-based investment bank that facilitates secondary
As recently as 2014, there were only 171 such companies
collectively valued at $100 billion, according to the report.
Late-stage companies include well-known consumer names like Uber
Technologies Inc, Airbnb Inc, DropBox Inc, WeWork
Companies Inc and Pinterest Inc as well scores of more obscure
companies in fields such as cybersecurity, cloud computing and
Looking specifically at unicorns, which are defined as
private companies that carry valuations of more than $1 billion,
Scenic Advisement found that there are now more than 100 - up
from just six in 2010. The data includes companies in the United
States, Europe and Israel, but excludes the many late-stage
companies in Asia.
The dramatic growth of high-valued private companies is
mainly a consequence of a huge influx of money into what are
seen as big opportunities in the tech sector, combined with
regulatory changes that have made it easier for companies to
stay private longer.
“We’re going to continue to see the majority of the value in
private companies accrue while they’re private, not once they
are public per the prior tech wave,” said Minal Hasan, general
partner of K2 Global, a venture capital firm. “As a result, more
money will continue to flow into private tech companies."
Hasan and others note that a lack of liquidity, paucity of
financial information and uneven corporate governance at private
companies can create a lot of risk. The largest of all the
unicorns, Uber, currently faces a string of problems that have
called its $68 billion valuation into question.
Yet there are few signs of a slowdown in the private tech
markets. Just last month, Japanese tech entrepreneur Masayoshi
Son announced he had raised more than $93 billion for the
Softbank Vision Fund, making it the largest tech fund in
“We may see some moderating of some of the extreme
valuations,” said Peter Christiansen, head of research at Scenic
Advisement. “But as far as the trends driving this, I don’t see
anything on the horizon that would mitigate what’s driven this
asset class over the last few years."
(Reporting by Salvador Rodriguez; Editing by Jonathan Weber)