A Shockingly Low Number of Companies Recently Acquired for $1B Were Unicorns

A billion dollar valuation doesn't always lead to a billion dollar acquisition.

Not all billion dollar acquisitions start out as unicorns, and vice versa. (Photo: Flickr/Owlana)

With 168 venture-backed companies currently worth over $1 billion ($600 billion, collectively), the Unicorn club is more crowded than ever. But while buyers haven’t been closing acquisition deals with them, it’s not because they’re not interested in big purchases. The data shows the market is doing fine when it comes to big buys.

So far in 2016, 21 private tech companies have been acquired for more than $1 billion. Only two of them (Jasper, purchased by Cisco, and Lazada, which Alibaba took a controlling interest in at a pre-money valuation), however, were unicorns and already valued at $1 billion or more.

As CB Insights, who published this data, points out, this isn’t all that surprising. Last year, $1B valuations were being given out left and right, and being deemed a unicorn was a status symbol of sorts that founders and investors believed would help attract press, customers and talent. When it became clear that big investments weren’t going to bare billion dollar exit fruit as quickly as investors wanted, they pumped the breaks with such investments, consequently slowing down the rate of unicorn births in 2016.

Startups aren't benefiting from an Oprah moment this year.

Startups aren’t benefiting from an Oprah moment this year. (Photo: CB Insights)

These unicorns have to grow into their high-flying valuations, given based on predicted (and hopeful) performance rather than real nickels and dimes, so what’s next for them? They either have to take a hit when it comes to an acquisition or keep burning through the money trying to make it work.

A Shockingly Low Number of Companies Recently Acquired for $1B Were Unicorns