Unicorn financings at record pace in the U.S.

The pace at which unicorns are minted slowed over the past couple of years in the United States, but 2018 could see a reversal back to a more rapidly expanding herd.

And perhaps a record.

Through the end of July, the year witnessed the creation of 27 private companies with unicorn valuations of $1 billion or more, according to data from PitchBook. If the pace continues through December, 2018 could end with 46 new unicorns, topping the 43 created during the previous peak year of 2015.

It also would suggest that investors continue to see private markets as the best venue for chasing growth.

Rate of U.S. unicorn formation (Source: PitchBook).

As it is, there are good reasons to believe the pace will keep up this year. Through the start of August, private market investors steered more than $19 billion to unicorn financings in the U.S., PitchBook reports. This already tops every other year since the unicorn phenomenon began in 2006, including the period of 2015 to 2017, when funding levels soared to more than $17 billion annually.

Support for the possibility also shows up in the amount investors are willing to place in a round. The average U.S. unicorn round increased to $325.4 million this year from $263.4 million last year. Clearly, excitement is running high.

A similar round-size increase also shows up in first-time unicorn financings, where deal value rose to an average of $287.7 million, PitchBook found.

The aggregate population of U.S.-based unicorn companies is 153.