How unicorns are turning into zombies
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📈 Trending Up: Jail time … striking … Gemini … media? … data transparency … search volume for ChatGPT, now at all time highs … WhatFix …
📉 Trending Down: Remote work … amity in the WordPress world … Northvolt …
💻 Cybersecurity is a mess: MoneyGram is down due to a “cybersecurity issue,” small town water supplies are getting hit, AutoCanada likely leaked employe data last month, the list goes on and on. And in this moment in time, some folks want to weaken encryption?
Market misery can be great for startups, though. Torq just raised $70 million against $24 million in ARR, a figure that it reached after tripling two years running; the upstart cybersecurity company is eyeing $100 million worth of ARR by “fiscal year 2026,” TechCrunch reports.
Show me the zombies
The unicorn landscape is lousy with zombies.
By that I mean that amongst the private market technology companies with valuations of $1 billion or more, a material fraction are currently growing too slowly — or burning too much cash — to raise more capital, sell, or go public.
The existence of zombie startups is not new. No matter the market conditions, zombies will get printed as investors make bets on companies that fizzle before they reach IPO scale. Such is the outlier game; most wagers won’t be outliers, by definition.
The situation today is different. During the 2021 boom, snagging a $1 billion valuation became — compared to more normal venture periods — easy, and thus more unicorns were created in a short period of time than ever before. Here’s a CB Insights charts from its excellent Q2 2024 State of Venture report: