Unicorns, private companies valued at USD 1 billion or more, are reshaping how innovation is financed. As they remain private for longer than ever, investors are increasingly asking whether they are missing out on years of growth and whether new investment products can help bridge that gap.
Introduction
Not long ago, buying shares in the next generation of technology leaders meant waiting for their initial public offering (IPO). Companies such as Amazon, Google and Facebook reached the stock market relatively early in their growth, allowing retail investors to participate in much of their expansion.
Today, the picture looks very different.
Some of the world's most valuable technology businesses, including SpaceX, OpenAI, Stripe and Anthropic, have remained private for well over a decade while continuing to raise billions of dollars from institutional investors. During that time, they have built global businesses, expanded into new markets and, in some cases, reached valuations exceeding those of many listed blue-chip companies.
This shift has created an important question for investors: why are companies choosing to stay private for so long, and is it becoming easier for individual investors to gain exposure before an IPO?
The answer lies in the evolution of private capital markets, the rapid growth of secondary markets and the emergence of new investment vehicles designed to make this previously exclusive asset class more accessible.
What is a tech unicorn?
A unicorn is a privately held company valued at USD 1 billion or more.
The term was introduced in 2013 by venture capitalist Aileen Lee to describe what were then exceptionally rare businesses. At the time, only a few dozen companies worldwide met that definition.
Today, unicorns have become a major force in global innovation.
According to PitchBook and Morningstar, there are now well over 1'000 private unicorns worldwide with a combined valuation measured in trillions of US dollars. These companies span sectors including artificial intelligence, fintech, cybersecurity, aerospace, enterprise software and digital consumer platforms. Many have become household names despite never having traded on a public stock exchange.
Artificial intelligence has accelerated this trend. Companies developing foundation models, AI infrastructure and enterprise software have attracted unprecedented levels of private funding, allowing them to scale rapidly without relying on public equity markets.
Why are companies staying private for longer?
The short answer is simple: they no longer need public markets to finance growth.
Forty years ago, an IPO was often essential for ambitious companies. Going public provided access to capital that private investors simply could not supply.
That is no longer the case.
Large venture capital firms, sovereign wealth funds, pension funds, family offices and institutional investors now deploy enormous amounts of capital into late-stage private companies. Instead of raising hundreds of millions through an IPO, successful start-ups can often raise billions while remaining private.
Research shows how dramatically this has changed.
In the 1980s, technology companies typically reached public markets after around six years. Today, the median age at IPO has increased to well over a decade, while some businesses remain private for 15 to 20 years or more. Stableton's research highlights that the median time before listing has risen to approximately 13.5 years, reflecting the broader availability of private funding.
Several factors explain this trend.
Access to abundant private capital
Private investors are willing to fund multiple stages of growth, allowing companies to expand internationally, develop new technologies and acquire competitors without issuing public shares.
Greater control
Remaining private allows founders to retain more influence over strategic decisions and avoid the pressure of quarterly earnings expectations.
Long-term decision making
Private companies can invest heavily in research, product development and infrastructure without worrying about short-term market reactions.
Better timing
Rather than listing because they need capital, many companies now choose to go public only when market conditions are favourable or when early investors seek liquidity.
Where does all this value creation happen?
One consequence of companies remaining private longer is that much of their growth now occurs before public investors can participate.
Historically, investors buying shares shortly after an IPO often benefited from years of rapid expansion.
Today, many unicorns reach public markets only after becoming mature businesses worth tens or even hundreds of billions of dollars.
This means a growing share of value creation has shifted from public markets to private ones. Stableton notes that many leading technology companies now remain private throughout some of their fastest growth years, supported by more than USD 132 billion of private capital raised across the twenty largest unicorns alone.
For investors, this represents both an opportunity and a challenge.
What is the secondary market for private companies?
A secondary market allows existing shareholders to sell their shares to other investors without the company issuing new stock.
Unlike a traditional funding round, where the company raises fresh capital, secondary transactions simply transfer ownership between investors.
Typical sellers include:
- early employees exercising stock options
- venture capital funds approaching the end of their investment period
- founders seeking partial liquidity
- early angel investors.
As demand for shares in successful private companies has grown, secondary markets have expanded significantly.
Although they remain far smaller than public equity markets, transaction volumes have increased rapidly over recent years. Stableton estimates that the secondary market has become increasingly liquid, particularly for the largest private technology companies, although most transactions still occur through specialised brokers and institutional networks rather than open exchanges.
The largest unicorns account for a disproportionate share of trading activity because investors generally prefer companies with established business models, stronger governance and more transparent valuations.
How can investors gain exposure before an IPO?
For most retail investors, buying shares directly in private companies remains difficult.
However, access has gradually broadened through several different approaches.
Venture capital funds
Traditional venture capital funds invest in early-stage businesses but usually require high minimum investments, long lock-up periods and accredited investor status.
Private equity and growth funds
These funds typically invest in more mature companies that are closer to profitability or an eventual IPO.
Secondary market funds
Instead of financing new businesses, these funds purchase existing shares from early investors, giving exposure to more established private companies.
Index-based investment solutions
A newer development is the creation of indices tracking the largest private unicorns.
For example, the Morningstar PitchBook Unicorn 20 Index was designed to follow a diversified basket of the largest and most liquid private unicorns. Some financial institutions have subsequently launched certificates or other investment products that aim to provide exposure to this index, allowing investors to access a diversified portfolio rather than relying on the success of a single company. Stableton's strategy is one example built around this concept. Diversification may help reduce company-specific risk, although it does not eliminate the risks associated with private markets.
One example available through Swissquote is the Stableton private equity offering, which provides eligible investors with access to professionally managed portfolios focused on private companies and late-stage growth opportunities. Rather than investing in a single unicorn, these solutions aim to provide diversified exposure to private markets, although investors should carefully consider liquidity constraints, valuation methodologies and their long-term investment horizon before investing.
What are the risks of investing in private unicorns?
Private market investing offers potential opportunities, but it also introduces risks that differ from those of listed equities.
Limited liquidity
Unlike publicly traded shares, private investments cannot usually be sold instantly. Some products offer periodic redemption opportunities, but these may be subject to limits or delays.
Valuation uncertainty
Without continuous public trading, valuations rely on funding rounds, secondary transactions or independent pricing models, all of which may differ from the price ultimately achieved in a future sale.
Longer investment horizons
Investors should generally expect to hold private market investments for several years.
Less transparency
Private companies disclose far less financial information than listed companies, making due diligence more challenging.
Company-specific risk
Not every unicorn becomes a public market success. While companies such as Airbnb and Shopify eventually listed successfully, others have experienced significant valuation declines or failed altogether.
Understanding these risks is just as important as understanding the potential upside.
Could private unicorns become a permanent asset class?
Some market participants believe they already have.
As secondary markets mature, pricing improves and investment vehicles become more widely available, private unicorns are increasingly being viewed alongside traditional asset classes such as listed equities, bonds and private equity.
Whether this becomes a lasting structural shift remains to be seen. IPO activity still plays a crucial role in providing exits for investors, while regulation, transparency and liquidity continue to evolve.
Nevertheless, one trend appears clear: the boundary between private and public markets is becoming less distinct than it was a decade ago.
Technology companies are staying private for longer because they can. Deep pools of private capital, founder-friendly governance and rapidly developing secondary markets mean that an IPO is no longer the only path to growth.
For investors, this has changed where much of the value creation takes place. Some of the world's most innovative businesses now spend years building scale before ever reaching a stock exchange.
New funds, certificates and index-based solutions are gradually opening this market to a broader range of investors, but private markets remain fundamentally different from listed equities. Liquidity is lower, valuations are less transparent and investment horizons are typically much longer.
For those considering exposure, understanding how these investments work, how they are valued and how liquidity is managed is essential. As with any investment, decisions should be based on individual financial goals, risk tolerance and time horizon rather than the appeal of a particular company or sector alone.
The content in this article is provided for educational purposes only. It does not constitute investment advice, financial recommendations or promotional material.
