Feb 1, 2019

The unicorn bucket challenge

Illustration: Sarah Grillo/Axios

Venture capital is about to get its own bucket challenge, in the form of unicorn IPOs.

For years now, growth equity valuations have been decoupled from the public markets. Not just on a longer lag, but totally untethered. Even that listed SaaS slump from a few years back didn't really make a dent on relevant valuations for Series C-Series Z rounds.

  • Part of the reason is that private investors haven't gotten a real report card on the unicorn phenomenon and, in particular, the mega-unicorn class. IPOs have been few and far between, with companies like Snap, DropBox and Spotify viewed as one-offs that should be viewed on their individual merits or demerits — not as reflections on the broader cash surge.

But that will change this year, with IPOs being prepped for Uber, Lyft, Slack, Peloton, Airbnb and more. That's a bucket.

  • If this bucket, on average, trades above its last private valuations, then it's validation for the mega-unicorn phenomenon. And vice versa.
  • Not only will it make or break existing funds, but it will likely determine how many zeros are added to new checks going forward.

Go deeper

Situational awareness

Photo: Drew Angerer/Getty Images

Catch up on today's biggest news:

  1. Scoop: New White House personnel chief tells Cabinet liaisons to target Never Trumpers
  2. Trump misrepresents 2020 Russia briefing as Democratic "misinformation"
  3. Bernie Sanders takes aim at Bloomberg: "Trump will chew him up and spit him out"
  4. Nearly half of Republicans support pardoning Roger Stone
  5. Scoop: Lyft acquires cartop advertising startup Halo Cars

Sanders takes aim at Bloomberg: "Trump will chew him up and spit him out"

Photo: Mario Tama/Getty Images

Bernie Sanders told CBS "60 Minutes" that he was surprised by Mike Bloomberg's lackluster performance at Wednesday's Democratic debate.

What he's saying: "If that's what happened in a Democratic debate, you know, I think it's quite likely that Trump will chew him up and spit him out."

Scoop: Lyft acquires cartop advertising startup Halo Cars

Photo: Drew Angerer/Getty Images

Lyft has acquired Halo Cars, a small startup that lets ride-hailing drivers earn money via ad displays mounted atop their cars. Lyft confirmed the deal but declined to share any details.

Why it matters: Ride-hailing companies are increasingly eyeing additional ways to generate revenue, and Lyft rival Uber has been quietly testing a partnership with New York-based Cargo that gives it a cut of the advertising revenue, as I previously reported.