Credit Suisse: It's A Tech Bubble, Stupid

Unicorns are suddenly everywhere, and that is literally nonsense.
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According to Bloomberg, Credit Suisse ran the numbers on tech valuations and has come away thinking "First, let's kill all the unicorns."

According to a 52-page note published this morning by analysts led by Eugene Klerk, the club of so-called unicorns (named for their possibly mythical valuations) just isn't as exclusive as it used to be. Some 124 startups now boast $1 billion valuations, Credit Suisse says, up from just four in 2009. Meanwhile, private tech companies such as Uber boast valuations greater than $50 billion. Only 87 of the companies in the S&P 500 can say the same thing.

That seems...odd. So does the proliferation of billion-dollar ideas.

By Klerk and his team's calculations, which are based on CB Insight data, the total implied valuation for all these unicorns combined comes out to a cool $468 billion. That's a 36-fold increase from $13 billion in 2009.

But why?

You also have some bigger funds investing in the startups simply because they know they will have to have them in their portfolio for clients at some point, so why not get in before they go public?

Indeed.

Credit Suisse: Tech Startups With Sky-High Valuations Are No Longer Special [Bloomberg]

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