The Morningstar PitchBook Global Unicorn Index, which measures the performance of privately held, late-stage venture capital-backed global companies with valuations of at least $1 billion, has outperformed the Morningstar Global Markets Index by nearly 13% in 2022, according to new insights from Morningstar Indexes and PitchBook.
Performance of the Index, one of a series of 11 new indexes created by Morningstar to measure performance of the late-stage venture capital market, relative to Morningstar’s global equity market benchmark can largely be attributed to its sector composition and geographic distribution.
Currently, the Global Unicorn Index is weighted heavily towards the Technology sector, at 48% relative to 18% for the Global Markets Index. In terms of geography, 49% of the Global Unicorns Index is currently invested in U.S. unicorns, relative to a 60% U.S. allocation for the Global Markets Index. And China-based unicorns currently make up 26% of the Global Unicorns Index relative to just a 3% weighting in China for the Global Markets Index.
Key performance drivers within the Global Unicorn Index this year have included Stripe, which comprises 3.18% of the index and had a jump in post-money valuation from $95 to $152 billion, and Checkout.com, at .84% of the index with an increase in post-money valuation from $15 to $40 billion.
Kyle Stanford, Senior Venture Capital Analyst, PitchBook
“Despite the economic slowdown, unicorns continue to be created at a relatively high pace in 2022. Globally, roughly 300 companies have reached the milestone throughout the year, which is higher than we have seen created in any year other that 2021. At the same time, several companies previously reaching the mark have further increased their valuations, including SHEIN, SpaceX and Stripe, each of which hold significant weights within the index. While unicorns are at risk of down rounds in the current climate, we have yet to see such financings occur en masse within the unicorn ranks.”
Sanjay Arya, Head of Innovation, Morningstar Indexes
“Private capital markets have grown substantially in the last decade, with more companies staying private longer or pursuing less traditional funding strategies. The growing stable of ‘unicorns,’ or VC-backed companies valued at $1 billion or more, around the world has expanded the opportunity set for investors. Our global unicorn indexes help provide more insight and transparency for investors into this expanding area of the global markets.”
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