A Decade of 'Unicorns' Ends With A Little Less Magic -- WSJ
December 18 2019 - 3:02AM
Dow Jones News
By Stephanie Stamm
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (December 18, 2019).
This was the decade when companies behind some of the world's
most-used apps went public at record valuations. In 2019 alone,
there were 13 U.S. "unicorns," or startups valued at $1 billion or
more, that made their public debuts -- far more than in any prior
year.
Despite their growing numbers and valuations, the performance of
unicorns has been a mixed bag. On the whole, an investor in the
second half of the decade was likelier to have put money into a
unicorn that was unprofitable and whose value has dropped as a
public company than an investor in the decade's first half, The
Wall Street Journal found.
From 2010 to 2014, nine unicorns reported annual profit. But
since the middle of the decade, only four unicorns have reported an
annual profit at least once, including Uber and Zoom Video in 2019.
Uber's profit was due to a gain on the sale of investments.
Public enthusiasm for a majority of this year's unicorns has
been lacking, demonstrated by the struggling market performances
since the companies' respective IPOs. Two companies, Lyft and
Slack, have yet to reach their original IPO values.
*Net profit includes non recurring instances such as a gain on
divestiture. Acquired by Microsoft in 2016. **Bought by Expedia in
2015. ++Results for the fiscal 12 months ended in the following
year. (1)Bought by Tesla in 2016. (2)Bought by Salesforce in 2019.
(3) Pinterest filed to be incorporated in 2008, had their first
funding round in 2009 and officially launched in 2010.
Sources: VentureSource (age, valuations); S&P Global Market
Intelligence (profitability); FactSet (market cap, performance)
Tom McGinty contributed to this piece.
(END) Dow Jones Newswires
December 18, 2019 02:47 ET (07:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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