Asia's unicorns are verging on stampede

Legendary Silicon Valley investor Bill Gurley recently predicted that this would be the year where we see at least one dead unicorn.

“Unicorn” is Silicon Valley parlance for a private tech company that is valued at greater than a billion dollars. And the reason he gives for their sudden demise is irrational exuberance in Silicon Valley:

Gurley warned during a talk at SXSW that “a complete absence of fear” in Silicon Valley has led to venture capital firms taking big risks on tech companies, and those companies could face a turn in the market in the near future.

“I do think you’ll see some dead unicorns this year,” he said.

But while Gurley’s pessimism is based on the mood in Silicon Valley, the reasoning doesn’t apply to an increasing number of unicorns.

According to a “Unicorn Tracker” run by data company CB Insights, there are currently 137 unicorns dotted around the world. But only 83 of these are in America.

The rest of the unicorns can be found spread through Europe, Asia and South America. China alone can claim to host 25 unicorns. Australia has one and Israel hosts two.

What’s more, the gap between Asia and the United States may be shrinking. The amount of investment deals struck in Asia has been steadily increasing, as has the total value of these deals. Here’s a chart from a recent CB Insights report:

courtesy CB Insights

And it’s not just quantity either. The US dollar value of the deals being done in Asia is starting to rival those done in the United States. Meaning, investors are willing to place bigger bets and see bigger upsides in the Asian startups.

courtesy CB Insights

But what may be the most telling of all is the quantity of unicorns that have been produced in the past year. According to the CB Insights data, 23 of Asia’s unicorns have been minted since the second quarter of 2014.

This works out to more than half of the amount that America produced. And America has both first mover advantage and the benefits of decades of agglomeration.

courtesy CB Insights

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