After years of burgeoning numbers, new unicorns have suddenly become scarce.
In January, no Bay Area venture-backed companies joined the ranks of those valued at $1 billion or more. That marked the second time in four months that no new unicorns were added to the local herd.
The San Francisco-Silicon Valley region's not alone in seeing unicorn birth rates plunge. Worldwide, just four venture-backed startups crossed the $1 billion valuation mark last month, and only one of those, a Boston-based cell engineering company, was based in the United States, according to PitchBook Data.
The collective worth of the four new unicorns was only $6.2 billion. That's the fifth lowest monthly total for new unicorn valuations since 2016, according to PitchBook.
Things have changed dramatically over the year. In January 2022, the Bay Area birthed 17 new unicorns.
Indeed, the region and the world is likely to see a culling of such billion-dollar companies. Globally, there are 971 startups worldwide that are valued at between $1 billion and $2 billion, according to data from CB Insights. With startup shares trading at a discount of 50% or more from their price at their last valuations and investors increasingly forcing companies to accept a reduction in their valuations as a condition to get more cash, those startups' unicorn status could be in jeopardy.
The last unicorn born in the Bay Area was BillionToOne Inc., a developer of a cancer test. Although it's valuation hit only $1 billion after its mid-December funding round, it may have a better shot than most at retaining its worth. That's because it raised it new funds at a time when investors were already putting pressure on valuations.
Here's more Bay Area venture and startup news from the end of the week:
Fundings
- Portside Inc., San Francisco, $50 million: Insight Partners led the Series B round for this provider of aircraft management software. I2BF Global Ventures also invested.
- Treasury Prime Inc., San Francisco, $40 million: Balyasny Asset Management (dba BAM Elevate) led the Series C round for this provider of online banking software. Banc Funds, Invicta Capital, Deciens Capital, QED Investors and SaaStr Inc. also participated.
- Onehouse, Menlo Park, $25 million: Addition and Greylock Partners led the Series A round for this provider of data management software.
- Recurrency Inc., San Francisco, $22 million: Bessemer Venture Partners led the Series A round for this provider of software that tracks sales and purchases for corporations. Former Stripe Inc. executive Lachy Groom, Color Genomics co-founder Elad Gil and Y Combinator Continuity also invested.
- Treau Inc. (dba Gradient), San Francisco, $18 million: Sustainable Future Ventures and Ajax Ventures led the Series A round for this developer of a window-hung heat pump heating and cooling unit. Safar Partners, Climate Tech Circle, Shared Future Fund, At One and Impact Science also participated.
- YIB Inc. (dba Yobi), San Jose, $2.37 million: HRC2139 Investments LLC and IRA Capital led the seed deal for this provider of small business customer communications software.
M&A
- Standard AI acquired Skip for an undisclosed amount. Formally known as Standard Cognitiion Corp. and based in San Francisco, Standard AI offers a checkout-free shopping system for retailers. Utah-based Skip — legally, GoSkip Inc. — is a developer of self-checkout kiosks.
Funders in the news
- Sequoia Capital added David Cahn as a partner on its growth team. Cahn comes to the Menlo Park venture firm from another one, Coatue Management, where he was a general partner and chief operating officer.
