The billion-dollar club is becoming less exclusive as investors, ranging from VCs to private equity to hedge funds and corporations, fall over themselves to invest in the next big thing. As we highlighted before, 38 tech companies entered the billion dollar club in 2014, but how does that level of activity compare to previous years?
When we analyze the number of new entrants to the billion dollar valuation club by year, we get a glimpse into just how hot valuations got in 2014. It saw a 150% increase in new billion-dollar tech companies versus 2013. In fact, it was just 3 less than the last 3 years combined.
While the US has more billion-dollar tech companies raising money in the private markets (51 since 2011), international companies have also seen a sharp increase in their billion-dollar circle with a 160% year over year increase in the # of entrants. Asia saw 8 new companies reach the billion-dollar valuation mark in 2014 with e-commerce being one of the bigger areas. As we’d previously detailed, Asia and Europe have been good places for $100M+ exits. It seems investors think they might also be good for mega-exits as well.
Of course, exiting for over $1 billion still is hard with only 1.1% of exits eclipsing the mark.
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