Morningstar lifts lid on unicorns with industry-first indexes

The first daily-published benchmarks for privately held companies with a market cap of more than $1bn


Morningstar has launched the Morningstar PitchBook Global Unicorn Indexes, which it says is the first index series to provide daily insights into the behaviour and performance of late-stage venture capital-backed companies.

The 11 global, regional, and single country indexes are designed to improve investor access to this growing, but somewhat inaccessible, market.

Unicorn companies are start-ups valued at over $1bn (£0.9bn), and Morningstar’s research has revealed that they are becoming increasingly common; the substantial growth of private capital markets in the last decade, and the fact that more companies are staying private for longer, or pursuing less traditional funding strategies, has driven their rise.

However, such companies have traditionally been investable only for pension funds or ultra-high-net-worth individuals, and Morningstar said that it has been a difficult market for index providers to track.

Sanjay Arya, head of innovation at Morningstar Indexes, expects the new indices to help solve this problem: “Our new unicorn indexes will go a long way toward bringing transparency to what has become a significant segment of the capital markets. Investors will be able to gain insights into late-stage venture capital markets through our sophisticated daily valuation methodology, increasing their odds of success.”

PitchBook, a data analytics firm, is an independent subsidiary of Morningstar, and the two will collaborate on the project. Senior venture capital analyst at Pitchbook, Kyle Stanford, said: “This product is a unique way to deliver Pitchbook’s extensive data and insights from its deeply ingrained industry analysts to investors.”

He added: “This is another important step in expanding our research capabilities for this growing area of venture capital.”

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