Editors' pick: Originally published Jan. 4.
As the club of 98 U.S. unicorns, or private companies worth more than $1 billion, look ahead to 2017, these well-funded startups and their backers can look forward to a wider range of exit opportunities as sales to nontechnology companies or even private equity firms gain prominence.
The U.S. unicorns collectively are worth about $372 billion, according to CB Insights, with the richest valuations belonging to Uber ($68 billion), Airbnb ($30 billion), Palantir Technologies ($20 billion), Snapchat-parent Snap ($18 billion) and WeWork ($16.9 billion). The latest to cross the $1 billion threshold, CB Insights reports, is JetSmarter, which is akin to Uber for the private jet market and has backing from Jay-Z, the Saudi royal family and private aviation company Jet Edge International.
In prior years, CB Insights recounts in a recent report, familiar tech names such as Alphabet Inc.'s (GOOGL - Get Report) Google, Facebook (FB - Get Report) , IBM (IBM - Get Report) and Oracle (ORCL - Get Report) , have dominated the market for unicorns. In the last year, however, Walmart (WMT - Get Report) , Anglo-Dutch consumer products maker Unilever (UL) , General Motors (GM - Get Report) and Chinese private equity firm Orient Hontai Capital moved to the cutting edge of tech M&A with the purchase of fast-growing, heavily valued tech outfits. Often, these companies have targeted upstarts that have disrupted their home markets.
Insurer Allstate (ALL - Get Report) said in November that it would pay $1.4 billion for the acquisition of electronics warranty service provider SquareTrade Holding, which had funding from Bain Capital Private Equity, Bain Capital Ventures and others.
A unit of Japanese advertising group Dentsu said in August that it would a majority stake in Merkle Group, reportedly valuing the Technology Crossover Venture-backed loyalty program and consumer data company at $1.5 billion.
GM acquired Y Combinator-backed Cruise Automation in May to add Cruise's deep software talent and rapid development capability to further accelerate GM's development of autonomous vehicle technology. Originally, reports put the price at more than $1 billion. GM later disclosed that it paid $581 million, though the sum did not include employee retention payments and other factors that would increase the final cost. GM started the year by announcing a $500 million investment in ride-sharing company Lyft in January.
Just below the $1 billion threshold, General Electric (GE - Get Report) said in November it would pay $915 million for ServiceMax, which provides cloud support for field technicians. Investors included GE Capital, PTC (PTC - Get Report) , Meritech Capital, Kleiner Perkins Caufield & Byers, Salesforce.com (CRM - Get Report) and others.
Non-tech money has come from China as well.
Chinese real estate and movie theater operator Dalian Wanda Group targeted highly valued private media companies in 2016. Dalian Wanda said in November that it would pay $1 billion for Dick Clark Productions, which produces the Golden Globe Awards, American Music Awards and Billboard Music Awards. In January, the company spent $3.5 billion to buy Jurassic World studio Legendary Entertainment.
Chinese private equity firm Orient Hontai Capital agreed in September to pay $1.4 billion for mobile ad startup AppLovin from investors, including Bright founder Eduardo Vivas, hedge fund manager John Burbank of Passport Capital; and Yahoo! Chairman Maynard Webb's Webb Investment Network.
For its part, private equity was active in the market for more mature, public software companies in 2016. Vista Equity Partners agreed to buy network management software developer Infoblox (BLOX) for $1.6 billion in September, and purchased marketing automation company Marketo (MKTO) for nearly $1.8 billion in August and event management software group Cvent (CVT) for $1.5 billion in November.
Meanwhile, Thoma Bravo bought healthcare IT company Imprivata (IMPR) for $544 million in September following the $2.8 billion purchase of data analysis and visualization company Qlik Technologies (QLIK) in August. And Accel-KKR LLC paid $509 million for spending management software company SciQuest (SQI) in July.