As unicorns grow rarer, maybe it’s time to look towards revenue, not valuations

Startups that were deemed worthy of a $1 billion valuation while still private were once so unusual, they seemed almost mythical — hence the “unicorn” moniker they were awarded. But when the COVID pandemic started waning, venture capitalists started letting out all their pent-up energy and capital and unicorns might as well have grown two horns, because they became as common as oxen.

We’re unsure if this is good news or not, but new data from Crunchbase indicates that unicorns are once again a rare occurrence.

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Only two new unicorns were minted in July, according to Crunchbase. That’s less than one every two weeks, and compared to the heady days of 2021, when some months saw more than 60 unicorns being minted — more than two per day — we’re now nearly close to zero. CB Insights data through June mirrors what Crunchbase reports, too.

This trend isn’t new, though. We dug into this very point back in the second quarter, noting that billion-dollar valuations are now frequently impractical for startups given how software revenue has been devalued in recent years. But there is a difference between unicorns being minted slower than they were in 2021, and just two new unicorns in a month.

What’s worse, there’s reason to expect we’ll see that number diminishing further.

Back when Aileen Lee coined the term ‘unicorn’ on TechCrunch back in 2013, the investor wrote that her team had uncovered 39 U.S.-based unicorns. At the time, given the bounds of her dataset (2003 to 2013), that worked out to four new unicorns per year and up to three “super-unicorns” every decade.

That’s not a lot. Indeed, it makes July’s rate of two new unicorns a month seem quite high.

So, how much has the natural pace of unicorn creation changed since Lee’s piece back in 2013? Let’s find out.