The unicorn stampede in Seattle has screeched to a halt.
During venture capital boom times in the midst of the pandemic, Seattle birthed a number of “unicorns,” a term defined a decade ago to describe tech startups valued at $1 billion or more. In 2021 alone, nine new unicorns were minted in the Seattle region.
But with venture capitalists tightening their belts and an overall funding slowdown, not a single Seattle startup this year earned a unicorn moniker, according to GeekWire’s reporting and PitchBook data.
There were 16 unicorns in the Seattle area as of January 2022. Three other companies — iSpot, Swiftly, and Flexe — reached a $1 billion valuation later that year.
In a tighter fundraising environment, many unicorns have been in major cost-cutting mode this year — or in one case, shut down altogether.
Convoy, the digital trucking marketplace company valued at $3.8 billion last year, abruptly collapsed last month and sold off its assets to Flexport.
E-bike maker Rad Power Bikes, valued at $1.65 billion in 2021, just closed a store and went through at least two rounds of layoffs this year. Logistics startup Flexe slashed 33% of its workforce in September.
Amperity, Icertis, Karat, Highspot, OfferUp, Outreach, SeekOut, also laid off staff over the past year.
Those aren’t signs of companies rapidly growing in revenue or valuation. In fact, some of those startups may no longer be unicorns.
Data from Hiive, a marketplace that lets investors buy and sell shares of private tech companies, shows several former Seattle unicorns with an approximate valuation now below $1 billion.
The lack of unicorn births is not just a Seattle trend.
Globally, just 64 startups became unicorns through Q3 of this year, according to Crunchbase. That compares to 319 new unicorns in 2022, and 619 in 2021. The pace is also slower than pre-pandemic times; 183 companies became unicorns in 2018.
There are currently 1,220 unicorns worldwide, according to CBInsights.
Some unicorns in the Seattle region have momentum. Fusion power company Helion Energy inked a key deal with Microsoft in March that could pave the way to the world’s first fusion power plant. iSpot in September acquired New York-based 606, its fourth acquisition in less than three years.
And perhaps a new unicorn will arise in the coming months. Funding to Pacific Northwest startups in Q3 was down nearly 50% year-over-year, but some companies are still raising sizable rounds, according to GeekWire’s funding tracker.
Biotech company Avalyn Pharma raised $175 million in September; space venture Stoke Space raised $100 million last month; and others including Viome, Chainguard, and MotherDuck raised money to fuel growth.
Several Seattle investment firms — Fuse, PSL Ventures, Ascend, Madrona Venture Labs, AI2 Incubator — have all announced new funds this year. So there is cash to deploy to potential billion-dollar companies that help venture capitalists deliver outsized returns to their backers.
It may just take some time before unicorn births are commonplace again.
