Perhaps too much A rebound from the slowdown in venture capital and the stock market correction that began in late 2021 is reviving unicorn prices.
Instacart and Stripe just rolled out new, lower 409a rates. Klarna has raised equity rounds, and other richly funded startups raised last year are eyeing opportunities for flat or lower rounds as 2022 continues.
And then there’s Discord, which raised $500 million last year at a $14.7 billion valuation, according to PitchBook data. The chat-focused software company, which previously rejected a bid for Microsoft for around $10 billion, has since dropped its valuation, according to Fidelity calculations. (The U.S. investment house, which focuses mostly on publicly traded stocks, owns some Discord stock in Contrafund, which gives us a formal view of how Fidelity fares.)
As Insider first reported, Fidelity recently lowered its outlook for Discord shares. Is that reduction fair? Today we’re digging into Discord’s price swing with Fidelity numbers and what we know about its growth trajectory, and then we’ll close by comparing the public markets to the company’s volatile valuation.
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If Fidelity’s cut is fair, Discord still retains Decacorn’s status as a member of the club of private companies valued at $10 billion or more. But Discord is cheaper than Fidelity’s new brand, or even more expensive, which bodes ill not only for the popular communication service known to gamers, but for many other unicorns as well.