Plummeting unicorn births underscore a changing venture capital market

It’s a rote story by now that many populations around the world are facing rapid decline. Birth rates in many countries are falling, leading to concerns about graying populations engendering imbalanced economies.

That’s true when we consider nation-level populations. It’s also true when we consider the rate at which new unicorns are born, measured by the pace at which global startups reach the $1 billion valuation threshold. Once rare, unicorns became far more pedestrian during the 2020-2021 peak of the last venture capital cycle. What’s old is new again — we’re seeing unicorn formation slow.

And rapidly. Per Crunchbase data, the rate at which unicorns are being born has fallen nearly 80% from its peak, which was notably reached one year ago.

From a trickle to a rush to a trickle

That unicorn formation is slowing should not surprise; after all, we’ve seen a deceleration in the pace at which prime unicorn rounds were disbursed. With mega-rounds slowing, it makes sense that fewer startups are able to raise new funding that pushes their valuation above the $1 billion mark.