Taking money, when it’s flowing freely, is a very appealing thing to do.
After all, there will inevitably come a time when cash becomes scarcer. And dry spells can sometimes drag on for years.
That’s certainly been the case for a high number of well-funded U.S. startups. Per Crunchbase data, around 280 companies 1 that raised $100 million or more in venture funding haven’t closed new financing since 2021.
The list includes quite a few one-time unicorns and emerging unicorns 2. Many are in sectors such as connected fitness, e-commerce and consumer-facing platforms, where overall venture funding has dropped precipitously since the boom.
To illustrate, we put together a sample list of some of the more heavily funded names that met this criteria:
The $77 billion club
Before they stopped raising money, these well-funded startups closed on considerable sums.
Collectively, an estimated $77.4 billion in equity funding went to the 279 companies on our list that last raised funding in 2021. To put that in perspective, that’s the average quarterly sum that went into all global startups last year. In other words, it’s a lot of money.
Not all has gone to waste either. It should be noted that the list is more than just struggling companies in sectors with heavily beaten down valuations.
The lineup also includes still well-regarded companies like WordPress developer and web hosting provider Automattic, which had a reported $7.5 billion valuation following its last round in 2021. Late last year, one investor marked down its stake by 10%, which is not nothing, but is hardly catastrophic.
Or take Grammarly, which picked up $200 million at a unicorn valuation in 2021. It just got taken off the list after announcing a $1 billion financing last week.
Still chugging along, but valuations have changed
Others are still chugging along, but prevailing valuations and investor tastes’ have changed drastically over the years.
For example, Lime, which partners with cities to offer electric bikes and scooters for short trips, announced in February that it achieved record revenue and positive free cash flow last year. Even so, after a string of disappointments, the micromobility space has long been out of favor with venture and public investors.
Another that’s seen ups and downs and made some sharp pivots along the way is Noom, which garnered a $3.7 billion valuation in 2021 as a weight loss app. Today, the company markets GLP-1 weight loss medications, along with hormone replacement therapy for menopausal women.
In the cloud kitchen space, meanwhile, Travis Kalanick’s CloudKitchens has also adapted to changing times. The space is no longer a startup investor favorite. However, CloudKitchens is still a going concern, with its founder looking closely at ways AI could optimize the business.
While they haven’t raised a reported round for a while, we wouldn’t count these businesses out.
Much variety in how startups age
As anyone who follows startups knows, the post-funding trajectory is anything but predictable. Even heavily funded unicorns might crash and burn, while others go on to be worth hundreds of billions.
Still others follow a pattern not too unlike a worn pair of shoes. They’re not worth the valuations investors paid, but they’re still quite functional. And who knows? For some of them, many good years may still lie ahead.
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