This week, Morningstar Indexes completed the first quarterly rebalance for the Morningstar PitchBook Global Unicorn Indexes. Additions and deletions to this new global series of indexes measuring the late-stage venture capital market at the indexes quarterly rebalance and during the quarter reflect the changing dynamics of the private equity market.
The Unicorn herd continues to grow in the U.S. and China, with both markets gaining in total market capitalization. The U.S. now stands at 51% of the Morningstar PitchBook Global Unicorn Index, up from 49% on September 19. And China has increased its weight within the Index to 28% from 26% three months ago.
The U.S. added 18 companies to the Morningstar PitchBook Global Unicorn Indexes, with blockchain infrastructure provider Mysten Labs and influencer-led sports metaverse gaming platform Loot Mogul among the largest companies to join. Notably, FTX was deleted from the Index during the quarter due to its high-profile bankruptcy declaration.
In China, Voyah Car Technology, Fujian Deer Technology and Prismlab were the largest of its 9 additions at the quarterly rebalance. Chinese late-stage venture capital companies Giant Biogene and Aimbio were deleted from the Morningstar PitchBook Global Unicorn Index during the quarter as they went IPO.
In addition to IPOs, other reasons that late-stage venture capital companies may be deleted from the Index during the quarter include leveraged buyouts or mergers and acquisitions. Additions to the Index can only happen at the quarterly rebalance date and are based on reaching a minimum post-money valuation of $1 billion.
Sanjay Arya, Head of Innovation, Morningstar Indexes
“This year has seen a sharp downturn in the valuation of companies seeking new investments. However, despite challenging market dynamics, innovation continues in late-stage venture across many sectors. There were 309 new unicorns minted in 2022 and collective market value of the unicorns globally increased from $3.9 trillion to $4.5 trillion in the past 12 months.”
Dan Cook, Head of Quantitative Research, PitchBook
“With a limited exit window in 2022, we’ve seen the universe of unicorns grow in both count and cumulative value. The other side of that coin, however, is that the 13 liquidity events observed in 2022 were the fewest since 2017, down a whopping 85% from their 2021 highs.”
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