The Takeaway
Investors are increasingly focusing on high-quality companies with robust growth potential and clear paths to profitability in the late-stage venture market. This shift is driven by higher valuations and multiples for profitable exits and IPOs.
In the second quarter of 2024, eight new unicorns—private venture-backed companies valued at $1 billion or more—joined the Morningstar PitchBook Global Unicorn Index, raising the total to 1,351 companies.
Limited exit opportunities have fueled growth in the secondary market, as institutional investors seek to match their liquidity needs. Pre-IPO unicorns, especially in AI, fintech, and cybersecurity, have experienced significant increases in trading volume and transaction sizes this quarter, reflecting strong investor confidence these sectors.
In the second quarter of 2024, the late-stage venture capital market began to stabilize, showing signs of gradual recovery in company valuations, fundraising, and exits following a turbulent period. The Morningstar PitchBook Global Unicorn Index, which tracks the performance of late-stage ventures, rose by 1.15% during this period.
Despite this modest rebound, the market remains polarized. While artificial intelligence startups are attracting substantial capital and driving valuations, other startups continue to face significant challenges in raising funds due to a more selective and cautious investment environment.
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