Values of European unicorns collapse amid sharp fall in public markets
A tough year in the public markets has taken a heavy toll on startups. According to new research, any unicorn in Europe which went public in 2021 has since shrunk in value.
The losses follow record highs for VC exit valuations in 2021. PitchBooka financial data company, attributed the downturn to a shrinking public market.
The company found that 13 unicorns went public during the bull market and IPO frenzy of 2021. Yet none have achieved a positive price return.
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Their numbers paint a bleak picture. By the end of 2022, more than half of them had lost more than 75% of their market cap since going public.
Their fortunes reverberated in Europe’s tech ecosystems. There was not a single unicorn exit through a public listing in 2022.
“The market closing to public listings plays on the recency of founders and their management teams as they have seen what happened to the companies going public in 2021,” the PitchBook analysts said in their latest VC valuation report.
Despite the difficult year for exits, positive financial progress has been made for Europe’s leading startups. Last year, 47 new unicorns appeared on the continent – the second highest number ever – bringing their cumulative number to 129. In addition, aggregated unicorn post money valuations rose dramatically before showing signs of a slowdown. Yet the newest members of the herd choose to remain private.
Food delivery startups in particular had impressive exits via acquisition in 2022. Finland’s Wolt was bought by DoorDash for €2.7 billion, Spain’s Glovo was acquired by Delivery Hero for €800 million, and Germany’s Gorillas was snapped up by Getir for €1 .2 billion.
However, these exit routes may turn out to be anomalies. According to Pitchbook, most unicorns now prefer to stay within the VC ecosystem.
