2020’s unicorns highlight shift in venture capital funding trends

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Healthcare, business productivity and fintech startups have dominated the unicorn class of 2020 as an exponential rise in demand for services in these sectors during the coronavirus pandemic has changed VC investing trends.

Since January, 71 companies in the US have reached a valuation of $1 billion or more, while 79 companies were minted unicorns in all of 2019, according to PitchBook data.

Fintech and business productivity software startups account for more than a third of this year’s unicorn total. And 11 companies in the healthcare industry have made their way onto the list.

One such startup is MDLive, the Miramar, Fla.-based provider of a telehealth platform that raised $75 million at a $1 billion valuation in September, according to PitchBook data. And Whoop, the wearable device maker that has drawn support from pro athletes like Kevin Durant, Eli Manning and Patrick Mahomes, recently picked up $100 million in new capital, valuing it at $1.2 billion.

When it comes to early-stage companies, “many investors have begun to step outside their comfort zones and embrace deals from entrepreneurs beyond their immediate network, particularly in sectors that accelerated due to the ongoing pandemic, such as telemedicine and education technology,” according to the Q3 PitchBook-NVCA Venture Monitor report.

Overall funding in fintech companies has also been on the rise with the increase of ecommerce and digital transaction activity during the pandemic.

International money transfer startup Remitly raised $85 million at a $1.5 billion valuation in July. And Greenlight Financial Technology, which offers debit cards for kids, joined the fintech unicorn cadre with a $215 million fundraise in September that valued it at more than $1.2 billion.

Six companies also catapulted to unicorn status this year with less than $100 million in total funding, according to PitchBook data. Startups like Notion, the developer of a work collaboration platform, and EquipmentShare, a construction tech company, each reached the billion-dollar mark with just over $70 million in total VC backing. Edtech company Quizlet reached a $1 billion valuation with $62 million in the bank.

The representation of consumer retail unicorns on this year’s list pales in comparison to 2019’s herd, which includes luggage manufacturer Away, mattress retailer Casper and beauty brand Glossier.

Sneaker marketplace Goat is the only retail company to become a unicorn so far in 2020. In September, the company raised $100 million at a $1.75 billion valuation, according to PitchBook data.

Featured image via Annie Spratt/Unsplash

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