Unicorns are everywhere these days. Just not around Seattle.
Even as the stock market tanks, private money continues to flow to these new giants of technology with names like Palantir, Cloudera and Nutanix which have shunned the public markets in favor of big-time valuations from venture capitalists. According to an analysis by CB Insights reported by The New York Times, there are now 131 private companies valued at $1 billion or more. In total, the companies have a combined valuation of $485 billion — which is far less than the $649 billion value affixed to Apple.
They are dubbed unicorns because companies of that size are rarely seen, but now with 131 on the list some have quipped that these uncommon creatures of the corporate world should just be called horses.
The list is led by Uber, the transportation giant that is valued at a whopping $51 billion. Others in the top 10 include Airbnb ($25.5 billion valuation); Snapchat ($16 billion valuation); and Pinterest ($11 billion valuation).
Interestingly, no companies that call Seattle home are listed in the group of 131, though there are deep connections everywhere. For example, San Francisco-based DocuSign, founded in Seattle and with the bulk of its workforce here, makes the list with a $3 billion valuation. Seattle-based OfferUp, a press-shy competitor to Craigslist which raised a big round of financing from Andreessen Horowitz earlier this year, is reported to have a valuation that tops $1 billion. It is not on the CB Insights list.
We’ve also seen a number of the companies on the list — Dropbox, Qualtrics, Nutanix, SpaceX — set up engineering centers in the Seattle area. (Largely to mine talent from companies like Amazon and Microsoft).
That’s the current situation now. But how do things look in terms of the next crop of unicorns, those on the cusp of reaching the $1 billion valuation mark?
At least in Seattle, these mythical creatures are still elusive.
According to a list of 50 up-and-comers compiled by CB Insights on behalf of The New York Times, no companies hail from Seattle. The closest candidate is Cyanogen, the mobile software startup which was started in Seattle and maintains a large presence here, but is technically headquartered in Palo Alto.
In fact, the research shows that half of the would-be unicorns are based in San Francisco/Silicon Valley.
Why hasn’t Seattle — home to huge tech brands like Expedia, Microsoft, Amazon, T-Mobile and Valve (a possible unicorn that often gets overlooked because it has grown without outside funding) — spawned more unicorns?
It is a a discussion we have kicked around on GeekWire many times in the past. And there are multiple reasons: The big companies suck the oxygen out of the startup ecosystem. The venture capital infrastructure is not here to support companies of this ilk. The entrepreneurs in Seattle don’t dream big enough, or swing for home runs.
Whatever the reasons, Seattle is at risk of losing its status as an epicenter for startup innovation if a few unicorns don’t emerge from the shadows. Even if predictions of “dead unicorns” come to pass, you need an entrepreneurial ecosystem that’s cultivating and supporting some of these world-changing companies.
After all, before the term unicorn came into existence, there were companies like Microsoft, Amazon, Zillow, Tableau, F5 Networks, Isilon and others that got started in Seattle.
Previously on GeekWire: Unicorn envy: Where is Seattle’s next billion-dollar idea?