Unicorns, Decacorns and Hectocorns
The Private Companies Primer
Haim Israel | Felix Tran | Savita Subramanian | Martyn Briggs
Key takeaways
- Tectonic transformation: the world is going private
When it comes to efficient allocation of capital throughout an economy, it would initially appear that public companies are more attractive than private, as they provide audited financials and information on operations. The investments are also liquid, low-fee and available to everyone. And yet, private companies are also transforming the world. If private capital assets under management were a country, it would be the world’s second-largest economy. - Private investments: the world’s second-largest economy
Since 2000, the number of U.S.-listed companies has halved to over 4,000, while the number of private venture capital-backed companies has risen 25x. Total private capital assets grew to $22tn in 2024, more than doubling since 2012. Companies are also turning or remaining private. Today, startups are staying private for an average of 16 years after being founded, taking 33% longer to go public than just a decade ago. - Better returns, control and lower costs vs. governance
Public markets offer key advantages like transparency, governance and liquidity, while the opacity of private companies and lack of periodic reporting could create greater financial and governance risks. We are not recommending private companies, but rather highlighting the pro and cons that led to the growth and outperformance of this asset class, as well as its risks. Over a 10-year time horizon, private equity has outperformed the S&P 500 by 6pp every year on average. Remaining private could avoid the potentially higher costs and regulations associated with being public. In the time spent on financial regulation paperwork every year, 12 Great Pyramids of Giza could be built. - Tech arms race: public market’s never been so dependent
The innovation behind the world’s most transformative private companies impacts not only their respective ecosystems but also the global economy. The access to technology is crucial for growth and the public market is racing to own it. - Private collection: meet the companies changing the world
The 120 largest Thematic unicorns have a total valuation of $3tn, as large as the market cap of Germany. The Private Magnificent-7’s recent combined valuation reached $1.4tn, almost 5x higher vs. 2023. We’ve reviewed 16 of them across different industries that are transforming the world, with a combined valuation of $1.5tn, >1% of global GDP.
Read our full analysis for a more in-depth look at these trends.
