A Decade of 'Unicorns' Ends With A Little Less Magic -- WSJ

By Stephanie Stamm 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (December 18, 2019).

This was the decade when companies behind some of the world's most-used apps went public at record valuations. In 2019 alone, there were 13 U.S. "unicorns," or startups valued at $1 billion or more, that made their public debuts -- far more than in any prior year.

Despite their growing numbers and valuations, the performance of unicorns has been a mixed bag. On the whole, an investor in the second half of the decade was likelier to have put money into a unicorn that was unprofitable and whose value has dropped as a public company than an investor in the decade's first half, The Wall Street Journal found.

From 2010 to 2014, nine unicorns reported annual profit. But since the middle of the decade, only four unicorns have reported an annual profit at least once, including Uber and Zoom Video in 2019. Uber's profit was due to a gain on the sale of investments.

Public enthusiasm for a majority of this year's unicorns has been lacking, demonstrated by the struggling market performances since the companies' respective IPOs. Two companies, Lyft and Slack, have yet to reach their original IPO values.

*Net profit includes non recurring instances such as a gain on divestiture. Acquired by Microsoft in 2016. **Bought by Expedia in 2015. ++Results for the fiscal 12 months ended in the following year. (1)Bought by Tesla in 2016. (2)Bought by Salesforce in 2019. (3) Pinterest filed to be incorporated in 2008, had their first funding round in 2009 and officially launched in 2010.

Sources: VentureSource (age, valuations); S&P Global Market Intelligence (profitability); FactSet (market cap, performance)

Tom McGinty contributed to this piece.

(END) Dow Jones Newswires

December 18, 2019 02:47 ET (07:47 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.