Unicorn Outcomes: Sequoia Capital Sees The Most $1B+ Exits And Tends To Get In Early

There have been 233 exits of private companies globally valued at $1B+ from 2009 through 4/19/2017. We define a “unicorn exit” as a merger, acquisition, or IPO of a company in which the valuation at exit is $1B+, regardless of the prior valuation of the company. All unicorn exits of VC-backed companies are featured on CB Insights’ real-time global Unicorn Exits Tracker.

We used the CB Insights database to identify which investors have backed the most companies that have gone on to unicorn exits and the cases in which investors have backed these companies at the early stages, when there is opportunity for the biggest return on their money.

Note: Our study looks only at companies’ first exits, and considers both VC and non-VC-backed companies.

Top investors overall 

Sequoia Capital takes the top spot as the most active investor in companies that have exited at $1B+, with 19 companies in its portfolio seeing unicorn exits since 2009, including Snap and LinkedIn. In second place is mutual fund T. Rowe Price with 18 unicorn exits, including pet care e-commerce platform Chewy, which was acquired by PetSmart for $3.35B on 4/18/17. Tied for third place are venture capital firms Kleiner Perkins Caufield & Byers (KPCB) and Accel Partners, both with 16 unicorn exits.

Key takeaways from our analysis:

• Among recent unicorn exits, 5 of the top 9 investors in companies with unicorn exits invested in Snap, 3 of the top 9 invested in Okta, and only 1 of the top 9, New Enterprise Associates (NEA), invested in Mulesoft. Snap went public on 3/2/2017 at a value of $24.8B, Okta’s IPO took place on 4/7/2017 at a value of $1.54B, and Mulesoft went public on 3/17/2017 at a value of $2.9B. T. Rowe Price was the only investor in the top 9 to invest in Chewy.
• 3 of the top 9 unicorn hunters are large investors that typically focus on other asset classes like public equities (mutual funds, investment banks, etc.) that have crossed over into private market investing, usually at the later stages. Those three firms are T. Rowe Price (18 unicorn exits), Goldman Sachs (11 unicorn exits), and Fidelity Investments (11 unicorn exits).
• There are now 60 institutional investors whose portfolios saw at least 4 unicorn exits since 2009.
• Groupon was the most common co-investment among the top 9 investors in unicorn exits, receiving backing from all but Sequoia Capital and Goldman Sachs.
• Examining recent unicorn exit successes, Fidelity Investments placed first for the most unicorn exits (6) in its portfolio since 2016, followed by Sequoia Capital with 5 unicorn exits since the beginning of last year.
• When comparing this analysis to our Unicorn Hunters analysis, in which we ranked investors by the number of current unicorns in their portfolios, only Sequoia Capital, KPCB, Fidelity Investments, and Andreessen Horowitz (a16z) appear on both rankings. Unicorn hunters looked at investors that have been the most successful in getting into companies currently valued at $1B+ vs. this analysis looking at those that have returned money to their LPs from actual $1B+ exits.

In addition to the above, Lightspeed Venture Partners, Meritech Capital Partners, and DST Global are tied for tenth place, with 10 unicorn exits in the time period.

Top early-stage investors 

Astute investors that are able to invest in these unicorn companies in early funding rounds stand to gain more from their exits, so we evaluated which firms were able to invest at the seed and Series A rounds in companies that went on to $1B+ exits.

Sequoia Capital also claimed the top spot as the most active early-stage investor with early investments in 9 companies that went on to unicorn exits, including LinkedIn, Palo Alto Networks, and WhatsApp.

Most efficient investors 

The proportion of total investments in exited unicorn companies to the number of those investments that were made at the early-stage offers another way to gauge a firm’s relative investment prowess. Below is a complete list of the top investors in companies with unicorn exits alongside the number of those companies that they invested in at the early stages.

A few of the most effective investors on this list are Union Square Ventures (7 unicorn exits, with 6 being early-stage investments), Spark Capital (5 unicorn exits with 4 being early-stage investments), and Morningside Ventures (4 unicorn exits with 3 being early-stage investments).

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