Illustration: Lazaro Gamio/Axios

They were called "unicorns" for a reason: No one really knew whether Silicon Valley's fabled billion-dollar valuations were real, or whether they were a mixture of delusion and financial engineering that would evaporate upon contact with harsh public-market realities.

Flashback: An influential paper in 2017 declared that, properly valued, most so-called unicorns were actually worth less than $1 billion. The paper downgraded Zoom's valuation to $500 million from $1 billion. Other unicorns imploded either before they went public (Theranos) or afterwards.

  • Blue Apron is a prime example of what skeptics were worried about. It raised private funds at a $2.2 billion valuation, tried to go public at a $3.2 billion valuation, eventually went public at a $1.9 billion valuation, and is now worth just $0.1 billion.

The big picture: Today's public markets are much less skeptical. The IPO market is on fire: Zoom is now worth $27.3 billion, Chewy went public this week and is now valued at $15 billion, Pinterest is worth $14.6 billion, CrowdStrike is worth $13.3 billion, and Beyond Meat is worth $8.5 billion. Even Fiverr, the freelance marketplace, is worth $1.2 billion. Slack expects that this time next week it'll be worth $17 billion or so, but given the exuberance in the market, that might be conservative.

  • Other former unicorns also have enormous valuations on the public markets. Uber is worth $75.1 billion, Square is worth $30.6 billion, Twitter is worth $27.9 billion, Spotify is worth $25.7 billion, Snap is worth $18.9 billion, Lyft is worth $17.8 billion, and Dropbox is worth $9.9 billion.

The bottom line: Consider the venture capitalists vindicated. For all that it's possible to be skeptical of public markets, they're the best corporate price discovery mechanism we've got, and they're ratifying — and even vastly exceeding — private valuations that many people thought crazy. For every disappointment like Blue Apron or Lending Club, it's easy to find a high-flying stock-market darling like Beyond Meat or Zoom.

Why it matters: Given how receptive the public markets are to the current stampede of unicorns, it's going to be increasingly difficult for the holdouts to remain private. WeWork is set to be a public company soon; it's fair to assume that CEOs at companies like Palantir, SoFi, Stripe, and Airbnb are feeling more pressure than ever to go down the same road.

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