A lack of liquidity, scarce opportunities for exits through public listings, and a flight to quality have slowed the creation of private companies with valuations exceeding $1 billion in 2024. This comes as the late-stage venture capital market has suffered from constrained capital availability, according to the latest Morningstar Unicorn Market Monitor.
The Morningstar PitchBook Global Unicorn 500 and Morningstar PitchBook US Unicorn 100 Index have gained 1.7% and 1.5%, respectively, year to date as of May 10. This is well behind their public market counterparts, the Morningstar Global Markets Index and Morningstar US Market Indexes, which have returned 7.9% and 9.5%, respectively, for the same time period.
Only 32 new unicorns were added to the Morningstar PitchBook Global Unicorn Index in the first quarter of 2024 and only five unicorns went public. The index currently stands at 1,343 companies—almost four times that of 2018, reflecting slowing exits for late-stage VC companies via IPO.
Sanjay Arya, CFA – Head of Innovation, Morningstar Indexes:
“Investors in the late-stage venture market are exercising caution, favoring strong companies with solid financials. The bar for deals has been raised, with only the most promising opportunities attracting capital.”
Kyle Stanford, CAIA – Lead Venture Analyst, PitchBook:
“The venture capital market in early 2024 shows signs of stabilizing after two years of significant decline. However, it is still in a phase of transition as it seeks to find a new normal. Many unicorns are stuck between being too large for private funding but unable to access new capital through public offerings.”
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