Editors' pick: Originally published Feb. 10.
2016 is not shaping up to be a great year for Internet unicorns -- but if recent history is any indicator, not all is lost.
The venture capital industry has seen startup valuations soar in recent years. According to Fortune, there are upwards of 170 companies valued at more than $1 billion -- commonly referred to as "unicorns" -- in the world today. But lately, market turbulence and company underperformance have fueled the flames of anxiety among VCs as valuations drop and exit opportunities appear fewer and farther between.
In 2015, the number of venture capital exits globally decreased to 1,053 from 1,139 the previous year, according to alternative assets intelligence agency Preqin. Moreover, 2015 saw the first decline in the aggregate value of exits since 2008, falling 42% to $73 billion from $125 billion. The agency points out that this is largely the result of a lack of "blockbuster exits," such as Alibaba's (BABA) IPO and Facebook's (FB) acquisition of WhatsApp, which both occurred in 2014.
At the World Economic Forum in Davos, Switzerland, in January, Jim Breyer, a venture capitalist who was an early investor in Facebook, said that while his long-term picture for the technology industry specifically is strong, he thinks it's in for a tough go in the near term, reports Business Insider. He said there is "blood in the water" and sees a situation in which 90% of unicorn startups will be repriced or die.
That isn't necessarily bad news. As The Deal's Chris Nolter recently pointed out, lower valuations may also create an opportunity for buyers with cash on the balance sheet. But it does change the game, given that the Internet sector was responsible for over a quarter of the total number of venture capital deals and a third of aggregate deal value in 2015.
The tech sector has managed to eke out some major deals in recent months. Here are three of the biggest venture capital exits -- and the companies behind them -- to come out of the Internet industry lately, according to Preqin.
It's worth noting that all three exits were announced when the acquired companies had already gone public. A Preqin spokesperson explained that although the companies had already undergone IPOs at the time of the transactions, some of the venture capital investors still maintained stakes.