Unicorns Reborn: The Surge of Early-Stage Startups in 2024

Through the past couple years, investors have discussed how the calming of the venture market was beneficial, allowing more time for due diligence and enabling companies to mature before seeking sky-high valuations. However, while investors haven’t fully reverted back to their 2021 attitudes, they are rapidly minting more early-stage startups as unicorns (private companies valued at $1 billion or more).

Bigger, faster

Last year saw 39 early-stage companies achieve unicorn status, marking a 70% increase from the 23 that reached this milestone in 2023. This uptick is still below the 184 early-stage unicorns minted during the peak years of 2021 and 2022, but represents a 22% jump from 2020, which had only 32 unicorns.

One significant driver of this surge is artificial intelligence. Many of the highest-valued early-stage startups last year were AI-related, particularly in the generative AI sector.

• Elon Musk’s generative AI startup xAI raised a $6 billion Series B, valuing the company at $24 billion.
• In September, Safe Superintelligence, another AI lab, raised $1 billion, valuing it at $5 billion.
• Poolside, which develops AI software for programmers, closed a $500 million Series B and was valued at $3 billion.

There’s more

While AI led the charge, other sectors also saw significant investments. For instance:

• Zhizi Automobile, an electric hydrogen truck company, secured $53 million at a $3.3 billion valuation.
• Chunqing Technology, creating EVs powered by alcohol and hydrogen, raised $135 million at $1.5 billion.
• Physical Intelligence, developing AI-enhanced robots, raised $400 million at a $2 billion valuation.

Old ways?

The increase in early-stage unicorns does not imply a full return to the 2021 investment frenzy, but it does indicate that VCs are once again willing to invest at high valuations for relatively young companies. The overall venture funding saw an uptick, suggesting that investors are eager to capitalize on the next big innovation, particularly in the AI space. The hype around AI is driving this trend, as investors fear missing out on potential breakthroughs.

Related reading:

• Hundreds Of Unicorns Haven’t Raised New Funding Since 2021
• Stanford VC Initiative Study: How Long Does It Take To Build A Unicorn?
• Crunchbase Unicorn Board Tops $1T In Funding Raised
• More Early-Stage Startups Are Getting Minted As Unicorns
• AI’s Big Day — Startup Safe Superintelligence Raises $1B At Reported $5B Valuation
• xAI Makes It Official — Raises $6B At $24B Valuation
• AI-Coding Startup Poolside Raises Massive $500M Series B