Startup valuations have reached a new record high. The average late-stage company is now a $1 billion unicorn.

  • The average valuation for late-stage startups has jumped past $1 billion, according to PitchBook.
  • Non-traditional investors in venture capital have boosted competition and pushed up valuations.
  • Early-stage valuations are climbing, too, as more VCs look to invest in startups sooner.
  • See more stories on Insider’s business page.

Building a billion-dollar business was once the stuff of legend. Now becoming a unicorn is the norm.

The average pre-money valuation for late-stage US startups — those that have raised a Series C or later funding round — climbed to a record $1.03 billion in the first quarter of 2021, according to PitchBook. (The median is also a record, but much more modest at $122.5 million.)

PitchBook attributes some of the jump in valuations to large asset managers seeking to get into highly-prized startups before they go public. Indeed, several VCs who previously spoke with Insider pointed to intense competition for deals, including from non-traditional investors, as a primary factor in pushing up valuations.

“The increased flow of mega-deals within late-stage deals in Q1 has placed a premium on valuations, as swaths of nontraditional and crossover investors climbed onboard,” according to PitchBook’s report.

PitchBook’s report also confirms another observation some VCs made to Insider: Investors are more broadly moving to earlier-stage companies for returns as valuations have climbed. The success of companies that have gone public in the last year, including Airbnb and Roblox, has encouraged them to seek out even bigger returns by getting into companies earlier, the report said. 

That’s pushing up valuations on the earlier-stage end as well. In the first quarter of 2021, a record 11 early-stage companies cracked $500 million in value, PitchBook noted.

However, valuations for angel and seed companies are still constrained. Because those startups typically don’t have much of a track record, they’re less likely to fetch big price tags, according to PitchBook’s report. Despite that, there could still be more funding activity at the earlier stages of VC investing.

“Enthusiasm for venture has moved well beyond the late stage, and with the growth in capital available for the industry, we expect this trend to manifest at the angel and seed stage as well,” the report said. 

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