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WeWork and other top startups were cut down to size in 2019. This VC thinks 30% of the more than 400 other unicorns will soon see their valuations slashed too. (UBER, LYFT, WORK)

WeWork and other top startups were cut down to size in 2019. This VC thinks 30% of the more than 400 other unicorns will soon see their valuations slashed too. (UBER, LYFT, WORK)
Silverton Partners



Some of the biggest private or recently private tech companies — including Uber, WeWork, and Slack — saw their valuations slashed in 2019.




Dozens of other unicorns — private companies with a valuation of $1 billion or more — will suffer the same fate in coming years, predicted Morgan Flager, an Austin, Texas-based venture capitalist.




A flood of money into the private markets has bid up values of many startups to unsustainable levels, Flager said.




In some cases, investors have mistakenly identified companies as tech firms and assigned them sky-high values they arguably don't deserve, he said.




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This year saw the humbling of some of the best-known unicorns — startups with a valuation of $1 billion or more.
Uber, Lyft, and Slack all saw their valuations fall after they went public, and Uber debuted at a far lower price than expected. Meanwhile, things were so bad for WeWork, it couldn't even go public, despite repeatedly slashing its valuation, and ended up needing a $9.5 billion bailout from SoftBank just to stay in business.
Morgan Flager thinks such companies won't be the last unicorns to be disgraced. Over the next three years, 30% of the more than 400 companies in the $1 billion valuation club will see their worth officially challenged as they raise new funding, predicted Flager, a general partner with Austin, Texas-based venture capital firm Silverton Partners. They'll either have to raise funds at the same valuation they were assigned perhaps years before, or they'll have to swallow being tagged with a slashed value, he said.
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