What’s worth more: Unicorns or the biggest US tech companies?

New data collected by Crunchbase News indicates that the value of global unicorns has crested the $4 trillion mark. The valuation milestone is notable not merely for its scale, but its relative size.

Compared to what? The value of the major tech companies of the West, namely the U.S. Big Five. Once they were known as Google, Microsoft, Apple, Amazon and Facebook. Today the group is known as Alphabet, Microsoft, Apple, Amazon and Meta, with the younger two of the five-company group undergoing name changes in recent years.

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Corporate branding shifts aside, it was back in 2017 that the five firms reached a combined $3 trillion in value. Back then, it felt staggering that less than a half-dozen companies could be worth so very much. A year later, in mid-2018, the group smashed the $4 trillion mark.

But 2018 wasn’t the peak, as you can imagine. The five companies actually managed to double their worth to over $8 trillion when stocks crested in late 2021; since then, the total has fallen to $7.2 trillion as of last Friday’s close, Wolfram Alpha data showed.

Unicorns have seen a similar pace of value expansion, albeit offset by a few years. For example, Crunchbase News also wrote last summer that the aggregate value of global unicorns had reached the $3 trillion mark, up from $2 trillion the year before. That, by the way, is the result of all those funding rounds last year that seemed to push more and more startups into the $1 billion valuation club, earning them what is colloquially known as “unicorn” status, a term that was coined on TechCrunch back in 2013.

Up, down

The comparison between the five most valuable U.S. tech firms and a loose grouping of high-value startups on a worldwide basis might seem slightly specious; why compare the two numbers other than to enjoy playing with very large figures?

After rising in unison for years, we’re possibly seeing a divergence in their two valuation directions. The biggest tech companies are taking some lumps, with Meta in particular shedding value. In contrast, the Next Generation of Tech Leaders is, well, raising lots of money and building private-market value.

Crunchbase News data is not indicative of a slowing-down in the pace at which unicorns accrete illiquid value. We expect the value of global unicorns to rise this year, perhaps at a slower pace – if the “things are slowing down in venture land” narrative bears out and is more than venture capitalists’ hope for lower startup prices – but still in a somewhat contrary direction to the value of the five U.S. tech firms that everyone can name.

Normally at this juncture, we’d say something rude about high-priced startups, asking how much value there really is in the collection of unicorns that more resembles a horde than a cohort. But! Not today. Instead, we wonder if the value of global unicorns compared to the market cap of mega-tech companies is a fun ratio or metric to track over time. If the private markets are building lots of high-value worth, then perhaps we should see unicorns worth more than majors? At least from an antitrust regulatory perspective, that would be encouraging.

Naturally, there are huge caveats with any such comparison. The pace of unicorn liquidity will impact the ratio, meaning that a weak exit market for unicorns would better store private-market value and make unicorns look better than they might actually be. At the same time, a slow unicorn exit market should, in theory, harm the value of those companies, so there are secondary effects to any particular way we want to smooth out the comparison.

Regardless, unicorn value is higher than ever. Which implies the need for an eventual waterfall of liquidity for the companies represented by the metric.

Let’s dive into the numbers and get our heads around the unicorns that are now worth, in total, more than $4,200,000,000,000.