The unicorn trend looks ready to Snap

A debacle of a first earnings report sent Snap shares down 20% this week, making the mobile app company the latest high-value startup whose private investors are taking a haircut. Silicon Valley spent the past few years building an unprecedented number of alpha startups. Now that they're delivering beta exits, the funding that propelled their rise is drying up.

Snap's last private round carried a valuation of $25bn, compared with its $21bn market cap today. Cloudera's public debut valued it just beyond half of the $4.1bn that Intel assigned to the company in a 2014 investment. On the M&A front, storage provider SimpliVity came up shy of its $1bn-plus private valuation in a $650m sale to HPE; and Turn, an ad-tech vendor that reached near-unicorn status with a $750m valuation, sold to Singtel for $310m. All of those outcomes should be the envy of investors in LivingSocial, which literally gave itself away to daily-deals rival Groupon last fall.

That's not to say there haven't been any positive returns this year from heavily funded and highly valued venture-backed firms. AppDynamics' investors came out ahead when Cisco paid $3.7bn for the company and with its $2.8bn market cap, MuleSoft has held up as a public entity, as have Okta and The Trade Desk.

Nonetheless, some of the part-time venture investors that fueled the rise of the unicorns are scaling back as they find that the returns aren't making up for the lack of liquidity in startup investing. T. Rowe Price, a backer of Snap and LivingSocial, has only announced one new investment in a private tech vendor this year. That's the same number that BlackRock and Fidelity Investments, which both invested in Turn's last round, have made so far. Investors that believe in unicorns are becoming as hard to find as the mythical beast itself.

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