The valuation of the top 100 tech unicorns fell by $10 billion in 2023, a new report has found, as worsening economic conditions led to fewer funding rounds and depressed valuations.
The aggregate value of the Top 100 Unicorns stood at $2,001bn compared to $2,012bn the year before, according to PwC’s latest Global Top 100 Unicorns, a drop of around 1%, compared to a rise of 30% in the previous year.
The valuation threshold to enter the Top 100 unicorns fell by $0.2 billion to $7.4 billion in line with the overall decline in the valuation of unicorns. Overall, the total number of Unicorns globally rose by 104 from 1,281 in 2022 to 1,385 in 2023, down compared to the previous year which saw 480 new entries.
Katrina Hallpike, Valuations Partner at PwC, UK, said: “Given the challenging macroeconomic environment and the decrease in volume of venture capital funding rounds in 2023, investors are increasingly focused on the path to sustained profitability alongside top line growth.
“With many businesses reluctant to raise down equity rounds, we are seeing a rise in alternative funding structures such as convertible loan notes and increased liquidation preferences, alongside businesses looking to delay their next fundraising.
“There is still an appetite for quality however and we are seeing growth businesses with strong fundamentals continue to achieve attractive valuations.”
The top 100 unicorns based in the US and China increased in value by 5% in 2023 while the top 100 unicorns from Europe and the rest of the world declined 18% ($88 billion) in value. There are six unicorns in the top 100 from the UK in 2023, one less than last year, with their collective value dropping from $121 billion to $112 billion.
Fintech continues to be the dominant industry in the Top 100 with 31 companies, the same number as the previous period, despite the aggregate value of these companies falling $71 billion.
