Which Tech “Unicorns” Are No Longer Unicorns?

Some unicorn startups have stopped being worth billion-dollar valuations.

The go-go days are still going strong for the tech economy. For the first time in the history of international stock markets, the world’s top five companies by market capitalization are all U.S. tech companies (Apple, Google, Microsoft, Amazon and Facebook). And it’s no secret that the wanna-be’s and up-and-coming tech firms have chosen the nickname “unicorn” — the Silicon Valley sobriquet for a startup valued on paper at $1 billion or more.

But some pops in the venture capital bubble have produced the more badass, goth nickname “unicorpse”. Unicorpse is the new Silicon Valley pejorative for a startup that has gone fully Lehman Brothers, or at least is widely speculated to have dipped below its billion-dollar peak valuation.

The pre-IPO investment firm Sharespost published an analysis this month concluding that 30% of all designated unicorns would lose their billion-dollar net worth. Their analysis doesn’t name names, but some digging and snooping can determine the who the earliest unicorn casualties are.

We’ll say up front that startup valuation is a subjective formula. No two investment firms determine valuation in the same way. That’s why the Wall Street Journal currently lists 155 unicorn tech firms, Fortune lists 174 and VentureBeat lists 229 unicorns. But analysis of recent business news, layoffs and valuation metric adjustments indicates which consensus unicorns are no longer unicorns, and have lost their billion-dollar net worth.


The poster child for unicorn flameout is Palo Alto blood-testing startup Theranos, whose meltdown was so bizarre and spectacular that Hollywood is making it into a movie. (Jennifer Lawrence will play disgraced CEO Elizabeth Holmes.) Purveyor of high-tech home blood-testing kits, Theranos was valued at $9 billion in 2014 and Ms. Holmes was No. 1 on Forbes’ “America’s Richest Self-Made Women” list. Since then, regulators have declared the kits junk science, Forbes has drastically reduced Theranos’ valuation to a sub-unicorn $800 million and Ms. Holmes’ net worth is now literally nothing.

DraftKings and FanDuel

These sleazy fantasy sports gambling sites ruined the 2015 football season by spending more on TV commercials than the entire U.S. beer industry combined. DraftKings was valued at $2 billion this time last year, while FanDuel had unicorn status at a $1 billion valuation. But the fantasy schemes have turned into a nightmare, and it’s game over for both companies’ unicorn valuations. A scandal revealed that employees were gaming the system with insider information, daily fantasy sports have been declared illegal in several states and the sites are now under three  — count ‘em  — three criminal investigations.

The Lending Club

San Francisco-based Lending Club technically left the unicorn ranch with their December 2014 IPO that quickly gave this “eBay for loans” an $8 billion valuation with the stock hitting $28 a share. But those shares have plummeted to around $5 apiece, top executives resigned amidst revelations they gave themselves loans just to boost company volume and 12% of the workforce was laid off in June. Throw in the SEC and Justice Department investigations, and this unicorn might lose more than just its horn.


When investment firm T. Rowe Price gave drastic haircuts to several unicorn valuations earlier this year, none was more thoroughly slashed than its investment in Evernote. The Redwood City note-taking app, a unicorn since 2012, lost more than 20% of its most recent billion-dollar valuation.

One King’s Lane

San Francisco-based e-commerce site One King’s Lane never quite made unicorn status, but it came pretty darned close with a 2014 valuation of $900 million. Those were the good old days, as the luxury home-furnishing retailer had to fire-sale itself off to Bed Bath & Beyond in June for $30 million — or about 3% of its peak value.

All of these ex-unicorns are pretty unusual outliers, with valuations done in by one-of-a-kind scandals or extreme circumstances. But these outlying circumstances are becoming more common in Silicon Valley, not less. Zynga had to put its office up for sale and Twitter is forced to lease out its office space as their revenue continues to disappoint. Zenefits has lost half of its $4.5 billion value amidst findings of illegal insurance practices and a frathouse company culture. Even Uber lost $1.2 billion in the first half of 2016 alone.

So don’t feel like a broke underachiever when you hear about all these startups and their billions of dollars in valuations. In many cases, you’re making more real money than any of them.

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