Just one in 6 unicorns are true IPO candidates at the moment

Centaurs can go public as quickly because the IPO window opens. Unicorns may wind up nowhere

There are extra than 1,000 personal corporations with billion-dollar valuations backed by enterprise capital that must go public. Fewer than one in six are IPO candidates, nonetheless.

Information from Bessemer Enterprise Companions’ State of the Cloud 2022 report breaks the unicorn market into two classes. (Notes here on TechCrunch+ from Bessemer associate Mary D’Onofrio.)

The primary contains unicorns which have reached the $100 million annual recurring income (ARR) threshold, which Bessemer dubs “centaurs.” The opposite group accommodates unicorns that haven’t but reached that income marker.

Per Bessemer, the variety of centaurs is rising over time — final 12 months, we had 60 corporations cresting the income benchmark, up from round 40 in 2020 and 35 in 2019. These numbers might seem spectacular, however when contrasted with the truth that greater than 500 unicorns had been minted final 12 months, there’s a yawning hole between corporations valued as IPO-ready and people who really are.

Performing some free math, 60 corporations reaching the $100 million threshold final 12 months in contrast with 520 new unicorns works out to round 11.5%, or fewer than one in eight. Nonetheless, Bessemer estimates that there are 150 personal startups with $100 million in annual recurring income or comparable, out of round 1,000 unicorns, which means that round 15% of unicorns have met the mark — slightly below one in six.

(For reference, I’m utilizing $100 million as an IPO-ready income benchmark, which I don’t assume will show controversial, and $1 billion as a valuation indicative of public-market scale worth, which, once more, shouldn’t engender an excessive amount of argument. Extra on each in a second.)

How did we wind up with so many unicorns and so few IPO-ready personal know-how corporations with IPO-scale valuations?

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