Global unicorn funding on track to surpass record levels set in 2017 as over $73B has been invested in first 7 months of 2018, or about 75% of 2017's $98B
Unicorns are not zoo animals. If they were, someone might have put up a “No Feeding” sign. — Instead, investors keep throwing bigger portions at these mythical creatures.
Context & Ripple Effects
Mid-2018 marked the peak of a feeding frenzy: over $73B had gone into unicorns in seven months, roughly 75% of 2017's full-year record of $98B, putting the year on track to blow past it. The groundwork was laid years earlier — a survey of 37 unicorns found liquidation preferences protecting investors in every single deal examined, making oversized private rounds feel safe to write.
The arc since confirms this was a cyclical high-water mark, not a new baseline: unicorn funding hit $139B in 2018 before falling to $85.1B in 2019 as new-unicorn creation slipped from 158 to 142 companies (the 2019 tally). The cohort created at the 2018 peak is still working through the system — by early 2025, CB Insights counted a record 1,200 VC-backed unicorns that have yet to IPO or be acquired.
First-order effects
- Late-stage investors are deploying capital at a record clip, with mega-rounds into already-private companies replacing IPOs as the primary way unicorns raise — and stay — private.
- Founders and existing backers of hot startups gain leverage: with $73B committed in seven months, competition among funds bids up round sizes and valuations.
Second-order effects
- The flood of private capital delays public listings, swelling the population of large private companies that mutual funds and crossover investors must mark on their own books — a valuation-risk transfer from VCs to broader holders.
- When the cycle turns, as it did in 2019 when funding dropped to $85.1B, the unicorns funded at peak prices face down rounds or stalled fundraising, testing those liquidation preferences.
Third-order effects
- If the pattern holds, each boom mints a larger class of paper unicorns than the last — 163 in 2020, 166 by May 2021 alone, roughly two per day in 2022 — while exit capacity stays flat, producing the 2025 backlog of 1,200 unexited unicorns and a generation of companies unable to raise again.
- Structurally, the unicorn label inflates toward meaninglessness: as the count passes 1,000, being a billion-dollar private company stops signaling scarcity and starts signaling how long a company has avoided the public market.
The trend: Private-market capital moves in boom-and-retrench cycles around unicorns — record funding years mint ever-larger cohorts whose exits lag far behind, leaving an accumulating backlog of unexited billion-dollar companies.