Living as we are in an IPO drought, new data points about the financial health of unicorns are annoyingly scarce. Unicorns — private tech companies worth $1 billion or more — have become an asset class of their own. Crunchbase counts 1,386 global unicorns, pegging their value at $4.8 trillion. CB Insights counts 1,180 worth $3.8 billion. Regardless of which number you think is more accurate, it’s clear that unexited unicorns represent one of the largest pools of paper wealth in the world.
A programming note: I am off next week. The excellent Anna Heim , who often helps write The Exchange and recently took over its weekend newsletter , will be filling in next week. She’s the best! I’m back on the 22nd!
That said, there’s a good chance that a portion of that illiquid value isn’t real, in that if every unicorn had to raise capital today, a good number would not be able to defend their most recent private valuation. However, if we ranked the unicorn cohort by quality, the best companies — often also the most valuable — are actually not as overvalued as you might think.