The unicorn club is becoming harder to get into, according to Goldman Sachs.
At the height of the current tech boom in Q3 2015, there were 25 new unicorns born in a single three-month period. A "unicorn" is a privately held tech startup, usually funded by VC money, valued at more than $1 billion. They used to be rare, hence the name. Uber is the most famous unicorn.
In the most recent period, Q1 2017, only three new unicorns were minted:
The "total number of unicorns appears to be stabilizing," according to Goldman analyst Heather Bellini, writing in a note to clients seen by Business Insider.
"From 1Q14 through 4Q15, on average, each quarter saw the addition of 15-16 new unicorns. However, following 4Q15, on average, each quarter has only added 5-6 new unicorns. For context, since the beginning of 2014, the number of unicorns has grown from 45 (at the beginning of 1Q14) to 153 (end of 1Q17)," she wrote.
Exits — via acquisition or IPO — remain healthy, Goldman says:
The US continues to be the best place to find unicorns. Fifty-nine percent of unicorns are in America, although that share is down from the low 70% range in 2014. Asia is increasing its share (29%) and Europe is holding steady with 10%.
The upbeat interpretation is that the top end of the market has peaked. It's currently coasting on a plateau. That's a good thing, because the alternatives are either for the market to become even more overblown, or to crash.
The fact that exits are steady also suggests that valuations are holding up ... or at least that the underlying businesses aren't made of rainbows and wishes.
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