On June 15, Quartz reported that all of Europe’s tech companies privately valued at $1 billion or more, called “unicorns” by the tech-finance industry, were together worth less than half of Facebook $META. Lest anyone accuse us of anti-Europeanism, here is the corresponding chart for American tech firms:
These figures come from Andreessen Horowitz, a well-regarded Silicon Valley venture capital firm, with figures that were accurate at the time of collation on June 5. I haven’t updated the figures since it makes no material difference.
What is particularly striking is that a single start-up, Uber $UBER, is worth 18% of the $221-billion index of a hypothetical tech-unicorn index. Chuck in Airbnb $ABNB, and the two together are make up more than quarter of the total value of America’s big tech companies.
The point isn’t that the companies are over-hyped (though it is useful to see the value of $1-billion firms put into some perspective).
Rather, it is the opposite—the venture firm’s researchers are instead making the (unsurprisingly self-serving) point that for investors, it makes more sense to invest in a basket of high-growth private firms than it does to put money behind a relatively mature public company already worth two-thirds of Microsoft $MSFT.
The firm’s entire presentation, titled “US technology funding—what’s going on?” is available here. It is a revealing look inside the finance factories of Silicon Valley—and the thinking that goes with it.
