Jenny Lee spoke about the fate of some companies with $1 billion valuations.
Nikki Ritcher for The Wall Street JournalDead unicorns.
That’s what venture capitalist Jenny Lee, managing partner of GGV Capital, thinks is in store for some of the startups that have managed to hit a $1 billion valuation — known as unicorns.
“2017 will see multiple unicorns die,” Lee said during a panel at The Wall Street Journal‘s tech conference Wednesday.
Discussion with fellow panelists Sam Altman, president of startup accelerator Y Combinator and Bill Maris, who leads venture capital fund Section 32, turned toward the idea of a mellowing in Silicon Valley. Altman said most companies are worth less than their valuations — although those high valuations could be worth it if another Facebook turns up.
Already, new unicorns are becoming less frequent. Back in 2015, VC money was flowing more freely. In the third quarter of that year alone, 25 companies reached a $1 billion valuation.
Since then, caution’s been the name of the game in Silicon Valley. A year later, in October 2016, VC funding hit a two-year low.
The one upside: Dying unicorns could show tech isn’t in a bubble, Altman said.
Lee thinks consolidation of services will be partly responsible for the disappearance of unicorns.
“The ones that can make it, I think will be magic,” she said.
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