Elad Gil and Shreyan Jain analyze the growth in unicorn market cap globally¹³⁹. Despite predictions that COVID would decentralize startups, SF has emerged as the centre of AI unicorn market cap with an 81% initial market share of generative AI companies. Many unicorns created during easy money times may lose their horns.

What's going on here?

Despite predictions of decentralization, Unicorns market cap continues to concentrate in tech hubs like SF, NY, and LA.

What does this mean?

The number of cities with just 1 unicorn has doubled since 2019, suggesting unicorns are spreading globally. Paris and London also gained share, while China has continued to lose share over the past few years. However, the top 3 US cities still account for 40% of global market cap. As macro conditions change, marginal companies and those outside major hubs are most at risk of losing unicorn status.

Why should I care?

If you're invested in or building startups outside major hubs like SF and NY, be wary - many may be overvalued. However, there are bright spots too - generative AI emerging from SF and fintech/crypto booming in NY. Have optimism but be cautious in your investments and location choices. Know that future unicorns will likely continue to concentrate in the Valley, NYC and other tech hubs.

Fun insight: SF Bay Area has 48 unicorns per Barry’s, while LA has just 3 and Miami has just 2.