Today at least 73 private companies are valued at $1 billion by venture capital investors. Last year, 48 companies entered that category. Startup valuations are reaching new highs too with companies like Uber and Xiaomi valued much higher than many public companies. There are many reasons for this increase including companies waiting longer to IPO, more venture dollars in play, and institutional investors investing in winners before they go public. However the billion dollar club still represents only 0.4% of venture-backed companies. Many of these startups wont be winners.
Such a number, while round and arbitrary, has long been hailed as a near-mythical achievement in Silicon Valley. The 2010 movie about Facebook Inc., “The Social Network,” hammered this notion into the mainstream American lexicon. (“A million dollars isn’t cool. You know what’s cool? A billion dollars.”) But today, a $1 billion valuation is no longer such a stretch. According to the Journal’s analysis, at least 73 private companies world-wide are valued at $1 billion by venture-capital investors. Consider that several years ago only a handful of private firms achieved this milestone—and 35 did so during the height of the dot-com boom in 2000, adjusted for inflation. In 2014, 48 companies entered the club—a pace of nearly one a week—and another 23 members moved further up the rankings after raising new funding.