An AI unicorn isn’t actually a dime a dozen, but they’re not exactly surprising at this point.
Six new unicorns were minted in May and, yep, two of them were AI companies, Crunchbase data released earlier this week showed. The first was Elon Musk’s xAI, valued at $24 billion after raising $6 billion from Andreessen Horowitz and Sequoia, among others. The second, Weka, also has a Musk connection: Musk associate Antonio Gracias’ Valor Equity Partners led the AI data platform’s $140 million Series E (Valor is also an investor in xAI).
While newly minted AI unicorns is a predictable enough phenomenon these days, I was caught more off guard by this: Two of May’s new unicorns are in Web3—one is Ethereum-based social network Farcaster, while the other is biometrics-focused blockchain identity startup Humanity Protocol (which seems to be a Worldcoin competitor).
It shouldn’t really be surprising, I suppose. Bitcoin and Ethereum are both up well over 40% year to date, and I’ve had VCs telling me crypto is back. So, it really does seem like AI and crypto are the elephants in the Silicon Valley funding room right now. (What does that room look like in its physical manifestation? Wrong answers only.)
Farcaster is especially interesting—with about 50,000 daily active users so far, it’s taking a serious shot at getting Web3 social media right. (My colleague Niamh Rowe spent a recent evening on the platform if you want to read more.)
So, xAI, Weka, Farcaster, and Humanity Protocol make four, and the last two are Iconiq Growth-backed Altruist and Sigma Computing, backed by Avenir Growth Capital and Spark Capital.
There are other worthwhile factoids from the Crunchbase report: While six new unicorns isn’t nothing, it still marks a relative decline—in April, Crunchbase tagged ten new unicorns and, in May 2023, the company tracked eight new unicorns. And, of the six new unicorns, five were in the U.S., with Hong Kong-based Humanity Protocol diverging from that pattern.
But the AI boom combined with renewed Web3 enthusiasm, that’s sticking with me. Slacking my colleague Leo Schwartz about this, he joked: “Time is a flat circle.”
As I laughed into my computer, I thought, yeah, it really is—but we’re also living in the age of the unicorpse, which means that just because you’re a unicorn today, doesn’t mean you will be tomorrow. And sure, that’s always been true, but it bears remembering that a high valuation can be fragile and sometimes fleeting. After all, a lofty valuation is a promise, not the fulfillment of one. And when a high valuation drops, it's crushing and awkward. I asked Crunchbase how many unicorns died recently.
"Insightec is reported to have raised at a lower valuation than $1 billion in June 2024," said Crunchbase's Gené Teare via email. "Other companies that were removed in Q1 2024 due to lower than $1 billion values include Cameo, VOI Technology, Bolt and Quora."
Some unicorns may be getting their horns—but others are getting those horns sawed off.
See you Monday,
Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
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