Uber just lapped Facebook. After a new round of investor funding, Uber Technologies Inc. is now valued at close to $51 billion, the highest valuation ever for a venture-backed firm -- a title once held by Facebook.
Uber isn’t the only tech startup getting sky-high valuations lately. Lodging rental site Airbnb is worth more than $25 billion and Elon Musk’s SpaceX is worth $12 billion and climbing. What’s behind these staggering startup valuations?
In large part, investors are driving the valuation game. More and more investors are trading higher valuations for protections against losses and other advantages. Higher valuations, which help nascent companies build credibility and recruit talent, are typically part of package deals in which the investors receive preferential treatment in the event of IPOs, sales or financial setbacks. The more generous the terms a startup can offer, the higher the valuation it can gain.
Billion-dollar startups are sometimes referred to as “unicorns,” since they are so rare – or at least they used to be. But over the last few years, these unicorns have become more like cattle and sheep, easy to find grazing in the fields of finance. The Wall Street Journal has tracked 108 venture-backed private companies in the billion-dollar startup club, with 74 found in the U.S. tech sector.
Here are the 15 most valuable startups in the U.S. (valuations from CB Insights).
Uber Technologies Inc. - $51 billion
Based in San Francisco, CA, Uber is an international transportation network company.
Airbnb - $25.5 billion
Airbnb is a website that allows individuals to rent out a place to stay in his/her home to users of the site.
Palantir Technologies, Inc. - $20 billion
Palantir is a software and services business, specializing in data analysis, serving state and local governments and private companies in the financial and healthcare industries.
Snapchat - $16 billion
Snapchat is a video messaging application that allows users to take photos, record videos, add text and drawings, and send them to a pre-determined list of recipients.
SpaceX - $12 billion
Otherwise known as Space Exploration Technologies Corporation, SpaceX is a high technology aerospace manufacturer and space transport services company.
Pinterest - $11 billion
Pinterest operates an eponymous photo sharing website through a web and mobile application company.
Dropbox Inc. - $10 billion
Dropbox is a file hosting service that provides cloud storage, personal cloud, file synchronization, and client software.
WeWork - $10 billion
WeWork administers shared workspace, community, and services for entrepreneurs, startups, freelancers, and small businesses.
Theranos - $9 billion
Theranos is a health-technology and medical-laboratory-services company that has created innovative approaches for laboratory diagnostic tests using blood.
Square, Inc. - $6 billion
A financial services, merchant services aggregator and mobile payment company, the company offers a few software and hardware payments products and has enlarged into small business services.
Stripe - $5 billion
A company that enables both private individuals and businesses to receive payments over the internet.
Zenefits - $4.5 billion
Zenefits offers cloud-based software as a service to companies for overseeing their human resources, with a concentration on health insurance coverage.
Cloudera - $4.1 billion
Cloudera is a software company that administers Apache Hadoop-based (an open-source software framework written in Java) software, support and services, and training to business customers.
Credit Karma - $3.5 billion
Credit Karma is a free credit and financial management platform for US consumers accessible on both the web and major mobile platforms.
Jawbone - $3.3 billion
Jawbone is a consumer technology and wearable products company that creates and markets wearable technology.