Data Liquidity Public Startups Venture

Monthly Funding Recap August 2020: 10 Unicorn Companies File To Go Public

As the public markets heat up, notable tech companies filed en masse to go public last month. They included Airbnb, Palantir, Unity, Asana, Snowflake, Sumo Logic, JFrog, Wish, GoodRx and Ant Group. Collectively, these companies have raised $30 billion and are valued at $224 billion, with Ant Group alone worth around two-thirds of this total at $150 billion. Other more highly valued private companies in this list include Palantir, last valued at $20.3 billion in 2015, Airbnb at $18 billion (down from $30.5 billion in 2018), and Snowflake recently valued at $12.4 billion.

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Global funding

Following a strong funding month in July, global venture funding in August was $18.8 billion—down by 33 percent month over month, but up 2 percent from August 2019. August is typically a slower month for venture funding, and that trend seems to have borne out despite the fact that the pandemic has disrupted travel plans and caused more investors and founders to stay home and work.

Of the $19 billion, $11 billion was invested in rounds above $100 million:

Decacorn valuations

As of last month, 31 unicorn companies are valued at $10 billion and above, with four of them raising funding at decacorn valuations in August.

They include Los Angeles-based SpaceX, which last month raised $1.9 billion and is now valued at $46 billion—$10 billion higher than its previous valuation in May 2020. Investors were not disclosed.

North Carolina-based Epic Games, maker of Fortnite, raised a $1.8 billion round that values the company at more than $17 billion. This is not a huge premium over their last post-money valuation of $15 billion in October 2016.

Robinhood, the zero-commission stock trading company based in Silicon Valley, raised a $200 million round led by D1 Capital Partners  that valued it at more than $11 billion. Its most recent valuation, in July, was $8.6 billion.

Finally, BYJU’S, an edtech company from Bengaluru, raised $122 million in a DST Global-led round valuing the company at $10 billion. BYJU’S had previously raised $100 million at the same valuation. In February, BYJU’S had raised funding at an $8.2 billion post-money valuation.

New unicorns

Currently 616 global private unicorns are valued at almost $2 trillion collectively—the current valuation of Apple. In total, the companies have raised $448 billion.

Seven new companies joined the unicorn ranks in August 2020. Gong, a revenue intelligence platform, led the pack with a $2.2 billion valuation. Blend, a provider that helps lenders streamline processing for mortgages and consumer loans, has the second-highest valuation among new unicorns at $1.7 billion.

The IPO market

The opening up of the IPO market for tech companies in June and July slowed down in August. The largest IPOs  in August were both headquartered in China and debuted on the NYSE. Ke.com, a platform for real estate professionals to list properties for sale or rent, raised more than $2 billion. Xpeng Motors, an electric vehicle company, raised $1.5 billion hot on the heels of competitor Li Auto, which went public on Nasdaq in July 2020.

The biggest pop in IPO pricing came from Austin-based BigCommerce, which opened at $24 and is up to $117, a 391 percent gain, as of Aug. 31. CureVac is also up substantially from $16 to $55, up 244 percent as of the end of August.

Acquisitions

In August, we tracked $9.6 billion across 100 venture-backed acquisitions. While the majority of companies do not disclose their price, the higher-priced acquisition amounts are typically disclosed. The largest acquisition in August was when AVEVA from the U.K. acquired California-based OSIsoft for $5 billion. Another cross-border acquisition was Dubai’s InstaShop being acquired by Delivery Hero in Germany for $360 million.

Late-stage funding

We are seeing increased investment activity in 2020 by private equity investors, hedge funds and sovereign wealth funds seeking to invest in highly valued private tech companies. According to Morgan Stanley, the percentage sold at an IPO for high-growth companies is now less than 10 percent. In the 2000s, companies sold as much as 30 percent at IPO.

As a result, many of these firms have shifted to private late-stage investing. This has exacerbated the trend of companies that can raise large funding on the private market staying private longer.

We list here the most active investors in rounds above $100 million in 2020. T. Rowe Price leads the list with 14 new portfolio companies this year.

Funding rounds above $100 million represent 56 percent of dollars in 2020. In 2019, rounds above $100 million were 49 percent of invested dollars. This is in part due to India’s Reliance Jio raising $20.5 billion from leading tech companies and late-stage investors.

In conclusion

The preferred option—by 2-to-1—for unicorn companies is to go public rather than be acquired, based on our analysis. Now, with the rise of SPACs and the option for direct listings to be a vehicle for raising funding, more options are becoming available for startups that are high-growth but not yet profitable. In Q2 overall, tech IPOs performed well, with an average first-day pop of 38 percent, according to Renaissance Capital.

With the median age for unicorn companies on our list at eight years, expect many more late-stage startups to be eyeing their exit options.

Methodology

Pro tip: Crunchbase Pro allows users to easily query the dataset. Here are some useful queries used in this report. See the Crunchbase Pro list for August global funding. Pro users can save the list to their account, filter by location, and match it against target customers. View the full list of private unicorns here and the list of emerging unicorns here. Learn about companies that recently went public, and perform Pro searches for recent venture-backed acquisitions here. 2020 unicorn IPOs are listed here.

Funding rounds included in this report are seed, angel, venture, corporate venture and private-equity rounds in venture-backed companies.

Please note that all funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.

Illustration: Dom Guzman

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