“Unicorns” in the startup universe refers to those companies which hold value in the billions. The top Unicorns are currently Uber ($51B), Xiaomi ($46B), Airbnb ($25.5B) and Palantir Technologies ($20B). If you have been paying attention to the startup world, you would have noticed fear of a Startup Bubble. The idea is that these Unicorns, with their valuations in the billions, are unprofitable. Some of which barely generate revenue at all. This approach resulted in the devaluation of some startups. Flipkart saw its value drop from $15B to $11B, Dropbox went from $10B to $4.9B, Snapchat from $16B to $12B, etc. So where does this leave us? Are these valuation made up?
Maybe some, but not for all.
Companies such as Uber, Airbnb, and Palantir generate significant amounts of revenue. They are likely to be close to their current valuations. Then if you add their assets to the equation, it makes it even more realistic. Palantir has been purchasing significant amounts of property on the West Coast. As well as generating close to $1B a year.
Other companies I would be cautious about include, Snapchat, and Dropbox. Maybe devaluing those companies wasn’t such a bad idea. These companies generate less revenue than their unicorn counterparts. What is the market price of information these days?
What do you think? Is this bubble going to burst?
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