Valuations of Startup Unicorns Skyrockets to $5 Trillion — New Research Shows

By Mariliana Fotopoulou Thursday, May 13, 2021

The total business valuation of startup unicorns worldwide surged by 70% since January last year, driven by increasing innovation and adoption following record-high levels of venture capital (VC) business investments amid the COVID-19 pandemic.

Gold unicorn chess piece.

COVID-19 Further Accelerates Digital Transformation

According to new data from “The Future of Marketplaces” report published by Adevinta, the business value of startup unicorns reached a total of $5 trillion, with 30 marketplaces around the globe worth over $20 billion.

The data shows that startup unicorns grew by 2.5 times more than the broader market year-over-year (YOY), marking a 23% rise across the board, and therefore, outstripping the Nasdaq and MSCI World Index. It comes as no surprise that startup unicorn companies launched after 2005 have seen more rapid growth than those before 2005.

“Today’s figures show that there is no sign of a slowdown in the growth of marketplaces. The intrinsic value they bring to consumers has been rising for years but really took off during the coronavirus pandemic, as correctly predicted in our first Marketplaces Report in 2020,” said Yoram Wijngaarde, founder of Dealroom.

The data shows that the biggest business growth amid the COVID-19 pandemic includes fashion, which soared by 142%, while food delivery and digital health business sectors grew by 132% and 120%, respectively.

The latest report marked the extension of “The Marketplaces Report” from last summer when research found that healthtech, online education, food delivery, recruitment, and passion economy startup companies were recording the biggest business growth in the wake of the pandemic.

In Q1, VC investments around the world touched a new record-high of $28 billion. This figure was fueled by dozens of mega financing rounds as well as the special purpose acquisition company (SPAC) business deals as business investors started looking for new ways to invest in the ever-growing tech sector.

Investments in marketplaces during that period nearly tripled since Q1 2020, amounting to $4 billion more than the last record-breaking quarter of Q4 2018. A large portion of those investments in Q1 focused on logistics and last-mile delivery services.

“Marketplaces have been able to grow so fast because of the network effects they exploit, and in the last 12 months more of them have become essential to our daily lives,” adds Wijngaarde.

Some of the biggest Q1 rounds include digital convenience store Gopuff’s $1.2 billion Series G in March, marking the second-biggest funding round across all sectors and industries for that quarter. Used car marketplace Cazoo raised $800m, while food delivery services provider Wolt secured $530 million in Series E.

The investing frenzy continued into Q2, with $12 billion of VC capital injected into the sector within the first five weeks of the quarter. Travelperk, Kry, and BlaBlaCar raised $160 million, $312 million, and $115 million, respectively.

"Marketplaces are well placed to take advantage of the market behaviours and shifts that have been born out of Covid, as well as the rise of digital adoption,” added Ovidiu Solomonov, SVP of Global Markets and Ventures at Adevinta.

Summary

The global business value of marketplace startup unicorns jumped by 70% to $5 trillion since January 2020 on the back of huge funding rounds and a SPAC frenzy fueled by excessive liquidity.

About the Author


Headshot of Mariliana Fotopoulou

Mariliana has an MSC in Consumer Analytics and Business Strategy. She has a special interest in fast-moving industries and Big Data.

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