- Some of the hottest startups from 2010 are struggling to get by or have gone out of business altogether, according to Pitchbook data.
- Groupon, Theranos, and Better Place were three of the 7 startups that closed funding rounds in 2010 that helped them achieve unicorn status with a valuation at or above $1 billion.
- Although funding rounds and subsequent valuations have increased in the years since, the data shows that not every high-flying startup can be a long-term winner.
- SpaceX and AutoTrader were two smash hits in 2010 that have increased valuations over the last 9 years. According to Pitchbook, SpaceX was valued at almost $33 billion, and AutoTrader is valued at $7.2 billion, and both have remained private.
- Groupon was the only unicorn of this cohort that went public, but has seen its market cap tumble from an IPO valuation of $12 billion to some $1.6 billion today.
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This last decade saw Facebook go from scrappy startup to global power; Uber from a car-ride concept to a verb. But the 2010s weren't especially kind to every single high-flying startup.
Looking back, the decade that is quickly coming to a close may mark a sea-change in Silicon Valley. The tech industry shifted from "Web 2.0" and social networking, to reinventing logistics and the workforce with self-driving cars and robotic pizza assembly lines. It was a dizzying pace of technological change, even in a region known for it.
That change did, however, leave some behind.
Of the seven companies that achieved a valuation of $1 billion or more in 2010, four are valued at far less than they were at their peaks, or otherwise completely out of business, according to data from Pitchbook reviewed by Business Insider.
The most extreme example is Theranos, the blood testing startup helmed by the now-infamous founder Elizabeth Holmes. The most extreme case study in what has happened to Silicon Valley since 2010 is The company's rapid rise and chaotic downfall has inspired book deals, documentaries, a feature film, and Halloween costumes.
In 2010, Theranos raised $45 million at a $1.12 billion valuation, in its fourth outside round of funding. By 2014, the company had achieved its peak valuation of $9 billion — but went out of business in 2018, following a string of scandals and charges of "massive fraud" brought against Holmes.
There are some success stories from the unicorn class of 2010: Elon Musk's SpaceX and AutoTrader have so far stood out as breakout successes. But even those billion-dollar startups that survived through 2019 have hit some rough patches, with some like Groupon or Better Place, struggling to keep pace with the vision set almost ten years ago.
Here are the seven companies that hit the $1 billion valuation mark in 2010, and how they've fared since:
Better Place declared bankruptcy before getting sold for just $12 million.
Founded: 2007 by Shai Agassi
What it did: Israeli startup Better Place was a byproduct of the green tech boom of the early 2010s. It offered infrastructure networks that made it easier for more drivers to purchase and use electric vehicles, and also created software that made electric vehicles more energy efficient. Electric cars had yet to reach meaningful adoption in the general public at the time. The cars had limited range and required lengthy charges, however and were more expensive than the average gas guzzler.
Unicorn round: $350 million Series B funding at a $1.1 billion valuation on January 24, 2010. HSBC Group led the round, and Morgan Stanley Expansion Capital, Lazard Centures, American Israel Corp, VantagePoint Venture Partners, Ofer Hi-Tech Holdings, and Maniv Energy Capital also participated.
Status report: After multiple management shakeups that failed to get the startup back on track, Better Place declared bankruptcy in May 2013. By July, the company sold to Sunrise Group, a New York consulting group, for just $12 million. The company had raised over $800 million in private venture capital prior to the sale.
Groupon went public in an IPO that valued it at $12 billion — but now has a market cap of around $1.6 billion.
Founded: 2008 by Andrew Mason, Brad Keywell, and Eric Lefkofsky
What it does: As online shopping became more popular, online deals site Groupon started cashing in by offering users specialty discounts on a range of products and services like haircuts, fitness classes, wine clubs, and photo prints. The Chicago-based startup has been widely credited for helping grow Chicago's tech and startup scenes in what had been largely dominated by more traditional finance companies.
Unicorn round: $135 million Series F funding at $1.52 billion valuation on April 19, 2010. Digital Sky Technologies led the round with participation from Battery Ventures.
Status report: Groupon went public on NASDAQ under the ticker symbol GRPN on November 4, 2011. Share prices were set at $20 and the company raised $700 million, which pegged its valuation north of $12 billion. As of the closing bell on Friday, shares were trading just under $3, placing the company's market cap around $1.6 billion.
AutoTrader was last valued at $7 billion, and now operates as part of a larger corporate empire.
Founded: 1997 by Chip Perry
What it does: AutoTrader was one of the early places for users to buy and sell cars online in the early days of online commerce. To compete with Craigslist and Cars.com, AutoTrader also offer educational material for car sellers, and eventually began offering financing options for would-be buyers.
Unicorn round: $537 million private equity from Providence Equity Partners on June 15, 2010.
Status report: In 2014, media conglomerate Cox Enterprises bought a stake in AutoTrader, in a deal valuing the car marketplace at $7 billion. AutoTrader today operates as a subsidiary of Cox, following a string of further financial maneuverings.
The downfall of Theranos is well-documented. The once high-flying startup is now bankrupt, and its founder is facing charges of fraud.
Founded: 2003 by Elizabeth Holmes
What it did: Founded in 2003 by Stanford dropout Elizabeth Holmes, Theranos promised to change the entire medical industry by simplifying blood testing. The proprietary testing device, called The Edison, used a fraction of blood needed by traditional processes to test for diseases and other genetic markers.
Unicorn round: $45 million in Series C1 funding at a $1.12 billion valuation on July 8, 2010. Draper Fisher Jurvetson, ATA Ventures, Black Diamond Ventures, Tako Ventures, and Continental Properties participated in the round.
Status report: Theranos' downfall has been well-documented:. Extensive reporting from the Wall Street Journal and elsewhere found that the science behind Theranos' tech was highly questionable, and Holmes now faces charges of "massive fraud." The company officially declared bankruptcy on September 5, 2018.
Perhaps the biggest hit out of the 2010 unicorn class, SpaceX is still operational as a VC-backed business valued at $33.4 billion.
Founded: 2002 by Elon Musk
What it does: SpaceX founder Elon Musk took the Silicon Valley term "moonshot" pretty literally when he started SpaceX, the startup that builds aerospace vehicles with the ultimate goal of passenger flights to space. The company's big bet has been on reusable rockets, which can drastically cut costs and make space transport more realistic — and it's already helping customers like NASA put payloads into space.
Unicorn round: $50.2 million in Series F financing at a $1 billion valuation on October 28, 2010. Valor Equity Partners, Founders Fund, and Draper Fisher Jurvetson Management co-led the round with participation from Seed-Resolute, Tao Capital Partners, Peter Diamandis, and Musket Research Associates.
Status report: Perhaps the biggest hit out of the 2010 unicorn class, SpaceX is still operational as a VC-backed business with a whopping $33.4 billion valuation. The company has raised upwards of $3.62 billion in venture capital and debt financing, and continues to test-launch its rockets as it inches closer to commercial travel.
VANCL tried to go public, but had to resort to additional private funding and debt financing to keep up.
Founded: 2007 by Nian Chen
What it does: VANCL is a Chinese startup that sells clothing online for men, women, and children. The startup's rise has coincided with a rise in Chinese consumer spending and a growing middle class, its target market. Similarly to American brands like Forever21, VANCL is targeted at fashion intended for a broad audience.
Unicorn round: $100 million Series E funding at a $1 billion valuation on December 1, 2010. Ceyuan Venture led the round with participation from IDG, SAIF Partners, and Asian Tiger Fund.
Status report: VANCL filed to go public but withdrew its offering on November 5, 2012. It raised an additional $100 million in venture funding from existing investors in 2014, and completed almost $74 million in debt financing at the end of 2014.
J.P Morgan has continued gobbling up ownership in Indian construction startup Nandi Infrastructure Corridor Enterprises (NICE).
Founded: 1995 by Ashok Kheny
What it does: Nandi Infrastructure Corridor Enterprises, or NICE, is a construction services company based in India. The startup offers project management tools and infrastructure for large development and construction teams.
Unicorn round: $110 million of growth equity from J.P. Morgan on December 25, 2010.
Status report: J.P. Morgan has continued financing the company and continues to buy a stake in private funding rounds. The company is still operational and employs 400 people in its Bengaluru headquarters.