Home billionaires nearly $100 billion poorer than a year ago
These 44 founders have lost half their wealth and are nearly $100 billion poorer than they were a year ago. Twelve are no longer billionaires.
For Matt Durot
LThis past January, credit card startup Brex raised $300 million from a series of A-list investors, nearly doubling the company’s valuation to $12.3 billion and making its Brazilian co-founders… Pedro Franceschi, 26 years old, and Henrique Dubugras, 27 years old.–the world’s youngest self-made billionaires.
“I think it’s easy for people to think we’re already successful,” Dubugras said. Forbes at the time. “We are and we are not. Obviously we are happy with what we have achieved, but there is much more to come.”
It is certainly too soon to write off the long-term success story that Brex could be. But a year later Forbes estimates the company’s value has fallen to $6.4 billion, nearly 50% less than 12 months ago. Meanwhile, Francheshi and Dubugras are no longer billionaires, worth an estimated $900 million each, down from $1.5 billion.
biggest losers
The fortunes of these unicorn founders have plummeted further since March.
Sources: Unicorn valuations based on pricing data provided by ApeVue, Caplight Technologies, and Notice, as well as Forbes reports.
They are in good company. In March 2022, near the peak of the startup funding frenzy, 44 unicorn founders, private companies valued at more than $1 billion, had a total value of $190 billion, according to Forbes’ dear. A year later, with cryptocurrencies plummeting and private markets following the path of their public counterparts, Forbes– in consultation with leading venture capitalists, investors and data providers – has reassessed the world’s billionaire-backed unicorns. The results are clear: half the wealth of the billionaires behind the unicorns has disappeared, leaving this elite group of startup visionaries $96 billion poorer than they were a year ago. Twelve of them are no longer billionaires. And that excludes a dozen Chinese unicorn founders who face their own unique set of problems (political and otherwise).
“That was a different time in the world, where it might have been worth X on paper, but that was a fun kind of money,” Matt Murphy, a partner at venture capital firm Menlo Ventures, says of the lead up. to the bubble peak. “I think it’s going to take a bit of a detox, because in the corporate world, people got really drunk on that, and everyone needs to get off the titration drug. That’s gone, it’s over, and it’s not coming back, so let’s get back to things that are historically more reasonable and refocus on building great companies in a more operationally efficient way.”
Some unicorns have already cut their own valuations. Online payments startup Checkout.com proactively slashed its internal mark to $11 billion in December, after investors assessed the company at $40 billion in January 2022. That brought down the fortunes of its founder and CEO. Swiss Guillaume Pousaz, briefly Europe’s richest tech entrepreneur, to $7.2 billion from $23 billion.
We are no longer billionaires
Billionaires in March, this dozen or so entrepreneurs have since fallen below the cut.
Sources: Unicorn valuations based on pricing data provided by ApeVue, Caplight Technologies, and Notice, as well as Forbes reports.
Irish payments giant Stripe, founded and run by brothers Patrick and John Collison, followed suit, cutting its internal valuation at least three times to $63 billion this month, after investors valued the company at $95 billion. in March 2021. The brothers are now worth $6.9 billion each, down from $9.5 billion. Apoorva Mehta’s Instacart and Ali Ghodsi’s software startup Databricks also dropped in October.
Swedish buy-now-pay-later startup Klarna, co-founded by former billionaires Victor Jacobsson and Sebastian Siemiatkowski (estimated worth $600 million and $500 million, respectively, down from $4 billion and $3.2 billion million), was the only unicorn with founders in Forbes’ list of billionaires to raise a new round at a lower valuation, the so-called “round to the downside,” which revalued the company by $6.7 billion in July 2022, after having raised a staggering $45.6 billion valuation alone nine months before.
But these half dozen companies were the exceptions. “Everyone hides behind the two or three years of track record they had with the money they raised and they avoid those negative rounds,” says Murphy of Menlo Ventures. “We’ve been at this for a year now, and if you’re a [venture-backed] business, you don’t want to have less than a year or less than six months of cash. Therefore, we believe that the market has to recover by the end of this year.”
Murphy says the layoffs are one way companies are “downsizing to make their cash last even longer.” Among the unicorns that have cut staff: 26-year-old Alexandr Wang’s ScaleAI, Cameron and Tyler Winklevoss’s cryptocurrency exchange Gemini, as well as Brex, Klarna and Stripe.
full list
Forbes revalued the fortune of these 44 founding unicorns.
Sources: Unicorn valuations based on pricing data provided by ApeVue, Caplight Technologies, and Notice, as well as Forbes reports.
Until now, Forbes They valued VC-backed companies by taking the valuation from their last funding round, no matter when it was, and typically discounting it by 10% due to lack of liquidity and financial transparency. The new Forbes The methodology brings valuations of corporate-backed companies more in line with the recent turmoil in the public markets and the internal and external downgrades these unicorns face.
If a company has raised money in the last three months, like Michael Rubin’s online retailer Fanatics or Palmer Luckey’s advocacy startup Anduril, Forbes used its most recent valuation from that funding round. In the absence of recent funding rounds or internal downgrades, Forbes Worked with three private market price data providers:vue ape, Caplight Technologies Y realize–revalue 30 unicorns that concentrate the bulk of the fortune of billionaires (and former billionaires). In most cases, Forbes averaged the data providers’ current valuation estimates for each unicorn, which are based on the performance of comparable public companies, secondary market activity, and publicly reported mutual fund brands. Based on this analysis, Forbes estimates there are now 32 unicorn billionaires outside of China, up from 44 in March, who are worth a combined $94 billion.
Not everyone agrees with our new approach. when told that Forbes was taking down the valuation of UK fintech Revolut to $13.8bn (from $33bn) and the fortunes of its co-founders Nik Storonsky and Vlad Yatsenko to $3.3bn (from $7.1bn). million) and $500 million (from $1.1 billion), a spokesman rejected. “We do not participate in speculation about our valuation. Since our last funding round, in which we were valued at $33 billion, Revolut’s profitable business has continued to perform strongly in all markets around the world.”
Of course, the value of a unicorn has real-world consequences for these companies far beyond the fortunes of their creators. “Whether the founder is a billionaire or not is probably not the most important thing to them unless they are massively leveraged against their [previously] high valuation,” says venture capitalist Eric Paley of Founder Collective. “There is an ego involved in all of this, but the biggest problem is displacement and a crisis of trust. In a way, it’s psychological, because I think it would have been much better to go from a $1 billion valuation to a $5 billion valuation than to go from $1 billion to $10 billion to $5 billion. Dollars”.
“Now all of their employee options are under water and they can decide to go somewhere else that they think is up and not down,” Paley adds. “Similarly, investors can see it as ‘who would want to be an investor in that company?’ All these people are struggling with what the company was and are tied to that in their minds.”
Note: This story was updated at 12 pm EST on January 27, 2023 to distinguish Checkout.com and Stripe’s internal ratings from the ratings assigned to them by outside investors.
IMAGE CREDITS
THE BIGGEST LOSERS
Sam Bankman-Fried: ANTHONY BEHAR SIPA/USA NEWSCOM. Guillermo Pousaz: HORACIO VILLALOBOS/CORBIS/GETTY IMAGES. Nik Storonski: HARRY MURPHY/SPORTSFILE FOR WEB SUMMIT/GETTY IMAGES. Barry Silbert: JOE BUGLEWICZ/BLOOMBERG. Cameron Winklevoss: MICHAEL PRINCE FOR FORBES. Tyler Winklevoss: MICHAEL PRINCE FOR FORBES. Obrecht Cliff: CANVAS. Melanie Perkins: DAVID FITZGERALD/SPORTFILE FOR WEB SUMMIT/GETTY IMAGES.
NO MORE BILLIONAIRE
Alexander Wang: CHRISTIE THERE IS AN HOUR FOR FORBES. Henrique Dubugras: KELLY SULLIVAN/TECHCRUNCH/GETTYIMAGES. Peter Franceschi: BREX. Prasana Shankar: UNDULATION. Alex Atallah: SASHA MASLOW FOR FORBES. Devin Finzer: SASHA MASLOW FOR FORBES. Sebastian Siemiatkowski: THE CLEVER. Barry Silbert: JOE BUGLEWICZ/BLOOMBERG. Sam Bankman-Fried: TOM WILLIAMS/CQ-NOMINAL CALL, INC/GETTY IMAGES.