Here in the final few working days of 2020, a surprising number of new unicorns have come to light. The mad scramble that investors are seeing in seed-stage startups appears to be reflected across the later stages as well.
That deal-making is still alive is not a surprise, but the cadence at which the market is crowning new unicorns is slightly startling, given the time of year. I’ve given up expecting a slowdown in venture capital, but I did anticipate some deceleration in huge rounds and resulting unicorn valuations this close to Christmas.
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This morning after contrasting a PitchBook-derived $500 million, post-money valuation for Bolt’s Series C that its CEO had said was roughly doubled in its Series C1, TechCrunch discovered that the online checkout software company likely landed a new valuation right around the unicorn mark. Bolt’s PR team declined to share a new valuation or grade our math, saying that its framing was “fine.”
One new unicorn — or near-unicorn, perhaps — was not enough for the day. The Information broke news this afternoon that Ironclad, which sells contract management software, put together a round worth “at least $100 million,” valuing the company at “more than $950 million.” Akin to Bolt, this unicorn-or-just-under valuation is also a doubling or better from its last private round.
In fact, two new unicorns were insufficient: a third company also made the mark today, namely Qualia, which trumpeted the valuation achievement in a release. Qualia builds real estate software.
Three unicorns in one day is busy. To see three come to light on December 21st is a little bonkers.
And they are hardly the only startups we’ve seen sprout horns and race about on four legs in recent days. There’s Boom, Zenoti and BigID also in the last week or so. That’s at least six new unicorns since roughly the mid-point of December. Wild!
Let’s talk about the rounds and see what we can learn from them.
Hello, new unicorns
Starting with Bolt, there are a few lessons for us to take away. First: not every company that secures a unicorn (or a near-unicorn valuation) wants to make noise about it. We’ve known this, but the company’s currently coy attitude underscores the point. Second from Bolt is that inside investors are more than willing to crown unicorns in their own portfolio.
According to CEO Ryan Breslow, after his company raised its Series C, the round’s lead investor offered the company another term sheet. But WestCap was not its only lead. General Atlantic came in as well, giving the $75 million investment two leads. Bolt had already decided to call its new round a Series C1 before General Atlantic entered the deal, the addition of which brought $15 million to what was previously a $60 million investment.
Bolt’s round fits neatly into a number of trends that we’ve been watching: inside rounds being bullish not bearish in 2020, the fastest-growing companies raising two rounds this year and the incredible focus by venture investors into startups that were not merely surviving COVID-19, but benefiting from how it shook up the market.
Turning to Ironclad, around $100 million at around a $950 million valuation is about as basic as a unicorn round can get. And because it has been more than a year since its last round, you might think that there is not that much to learn in its case.
Wrong! Ironclad’s fundraising history might look dull, but it is not. Indeed, the company raised both a Series A and B last year, worth $23 million and $50 million apiece. This tells us a few things. First, that Ironclad has managed to raise three rounds in less than two years. That’s impressive. And second, that it has doubled its capital raised in each of them at minimum.
So the piling into remote-work enabling services, and software more generally, appears underscored by the company; if you were expecting a slowdown in COVID-themed rounds, perhaps holster that anticipation for a while.
Accel, Sequoia and Y Combinator were in the company before its most recent round. Surprise.
Qualia’s $65 million Series D is a little boring. It was the company’s second successive round led by Tiger, but past that it’s not super interesting. Its preceding round was worth $55 million, about 13 months ago. The timing is a little aggressive, but aside from the fact that another new unicorn slipped past us unawares, we don’t have much to add.
Another Tiger deal, BigID’s new $70 million made it a unicorn last week. The transaction is worth noticing if for no other reason than its lead investor appears to be very active in crowning new billion-dollar startups. That implies robust confidence at Tiger in the public market’s valuation marks, which is something worth remembering.
But to see big rounds go into software and security startups — what we see with Qualia and BigID — is boring. What we want is something with more bang to it. Boom, for example, will do.
Boom is working to build faster-than-sound jets for quick-as-hell travel. And its latest $50 million is enough capital to make Boom a unicorn. It has raised $210 million and will need more capital to get to market in 2026 with a test plane. Perhaps it will make it.
But what is entrancing about the round is how far in advance Boom has managed its valuation; perhaps a company that requires as much capital as Boom does would have to attain a high valuation to have enough equity to raise as much money as it needs. But a plane company more than six years out from commercial tests in a category that died out ages ago is bullish as all hell.
The Boom round paints the picture of lots of expected future macroeconomic growth. Everywhere.
Finally, India’s latest unicorn, Zenoti. I did not set out out to write a post about American unicorns, so it’s good to get another nation involved. Per TimesNowNews, Zenoti, which provides software to salons and spas, became a unicorn on the back of a $160 million raise. That is a huge chunk of money, frankly, and shows that vertical SaaS really can scale.
Six new unicorns. Or as I think about it, six more unicorns that need an exit. We just got through a bunch of IPOs. But at this pace of unicorn creation, it’s easy to worry that we’ll wind up at the back-end of 2021 with more unicorns that are still private than we have today. Again!
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