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Collapse in Q4 Venture Deal-Making Could Signal End of Unicorn Era

There were nine new unicorns in Q4. There were 23 in Q3.

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A study released in October found that venture capital firms were raising significantly less money than in previous quarters. Around that time, a bunch of well-known investors — like Union Square Ventures’ Fred Wilson — began saying that the days of steady unicorn valuations were coming to a close.

Here’s more cold water: An upcoming report from CB Insights says that VC funding levels in the fourth quarter of 2015 “fell 30 percent amid weakening mega-round activity while deal activity fell 13 percent vs. the previous quarter.”

Here are the core findings from the KPMG International & CB Insights 2015 Venture Pulse Report, which will be released on January 19:

  • In the third quarter of 2015, there were 72 $100 million equity funding rounds for VC-backed companies. In Q4, there were only 39 of those gigantic growth equity rounds.
  • There were only nine new unicorns birthed in the fourth quarter, versus 23 in Q3.
  • Deal-making activity in general fell to its lowest levels since the first quarter of 2013.

While these numbers are by far the most concrete indicator that venture startup investing is getting less, um, frothy, there have been warning signs for the last few months. December data from Ernst & Young indicated that tech startups were avoiding IPOs, partly fearful that public markets would tank their private sector valuations. In November, a series of valuation writedowns of a number of unicorn startups shaved billions off Snapchat, Zenefits and other high-flying and fast-growing tech companies.

Below are some of the charts from the upcoming report, which you can also find in a blog post on the CB Insights website:

CB Insights
CB Insights
CB Insights

This article originally appeared on

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