---
title: "How VCs Value Rainbow Foals in 2022"
description: "Explore how SaaS startup valuations evolved from $1.5B to $9.8B median market cap. Data-driven analysis of VC returns across funding stages 2015-2022."
categories: ["fundraising","data analysis"]
keywords: ["Theory Ventures","Tomasz Tunguz","venture capital","SaaS valuation","unicorn startups","fundraising","market cap analysis","data-driven investment","VC returns","startup funding stages"]
ai_summary: "Explore the evolution of SaaS startup valuations and VC returns from 2015 to 2022, highlighting market cap changes and investment multiples."
date: 2022-06-21
lastmod: 2026-07-23
canonical_url: https://www.tomtunguz.com/history-of-unicorns/
author: "Tomasz Tunguz"
---

When Aileen Lee published ["Welcome to the Unicorn Club"](https://techcrunch.com/2013/11/02/welcome-to-the-unicorn-club/) -  the article that coined the word unicorn for a $1b startup - the average public SaaS company [commanded a market cap of $1.5b](https://res.cloudinary.com/dzawgnnlr/image/upload/v1655748707/hx4c1ne5grhnwyumffql.png). 

I remember thinking a $1b M&A or IPO was so rare an investor might hope to achieve it once or twice in a career. Fewer than 15 SaaS companies traded on public exchanges then. With at least 20 firms and several partners per firm chasing unicorns, upstarts faced stiff odds.

From 2007 to 2016, $1.5b marked the upside case for most VC software and infrastructure investment memos. 

##### 2015 Return Multiple by Round
| Round | Post, $m | Return Multiple at $1.5b | 
| --- | ---: | ---: |  
| Seed | 8.7 | 172x | 
| Series A | 28.4 | 53x | 
| Series B | 74.8 | 20x | 
| Series C | 139 | 11x | 
| Series D | 269 | 5.6x | 

If you were to read a memo from that era, you might have seen a table resembling the one above. It shows the potential return multiple from Seed to Series D at the median post-money of the era spanning 172x to 5.6x depending on the round.

![image](https://res.cloudinary.com/dzawgnnlr/image/upload/w_700,c_scale/v1655748707/lqgv1sbbbhtx7m47oftn.png)

Within five years, the median public SaaS market cap exploded from $1.5b to $9.8b in 2021. The return potential 10xed. The largest startups kissed $100b in market cap and higher.

Return projections skyrocketed. Competition fueled a surge in valuations. 

Then the stock market's fall reversed the effect. Mean market cap halved to about $4.5b. 
##### 2022 Return Multiple by Round
| Round | Post, $m | Return Multiple at $4.5b | RM at $1.5b (2015) | 
| --- | ---: | ---: |  ---:|
| Seed | 35.2 | 128x | 172x | 
| Series A | 101 | 45x | 53x | 
| Series B | 352 | 12.8x | 20x | 
| Series C | 857 | 5.3x | 11x | 
| Series D | 2,226 | 1.9x | 5.6x| 

Re-running the multiples math for today, return projections for the typical growth round collapsed.  Series Cs dropped from 11x to 5.3x. Series Ds cratered from 5.6x to 1.9x by 66% - which is [inline with the public market drop](http://tomtunguz.com/trends-in-multiples/). 

The more market caps on unicorns compress, the greater the downward pressure on rainbow foals' valuations. 

The silver lining: the median public software company in 2022 is three times as valuable as in 2015,  which suggests valuations should settle higher than that era.