Doubling in value should be hard. But tech start-ups are defying that logic, with companies not just reaching billion-dollar valuations but expanding.
The term 'unicorn', reserved for the rare start-up that reaches a $1 billion valuation, is being thrown around in mainstream media and casual conversation because of the speed at which companies are reaching the milestone.
But it's not just about getting there. CB Insights, a New York-based research firm, released data on Friday showing that the private companies worth the most are multiplying their valuations at a ridiculous clip.
Doubling in value in a year is hard, and should get more challenging as the numbers get larger. Not in this market.
Take WeWork for example. The provider of co-working space in 13 cities across the globe increased by 233 percent in less than a year, when it raised money in December at an almost $5 billion valuation. Uber, the most highly valued U.S. venture-backed tech company, rose by 167 percent between June and December to $40 billion.
Airbnb surged 300 percent to $10 billion at the time of its financing last year, but it had been almost two years since its previous funding round, a glacial pace in this environment.
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"In earlier days, this lag would be customary," CB Insights wrote. "But in the current climate where hedge fund, private equity and mutual fund money is pouring into tech companies, two years has become a long time between fund raises."
A total of six U.S. private companies are worth at least $10 billion, including Snapchat, which is said to be approaching a $19 billion valuation, almost double the $10 billion price tag it garnered in December.
According to The Wall Street Journal , at least 73 companies across the globe are valued at $1 billion or more by venture capitalists.