Startup Trends: The growing number of AI “new-icorns”

Since 2024, there has been a notable uptick in private artificial intelligence (AI) companies achieving valuations of more than $1 billion, a phenomenon that is giving rise to the term “AI new-icorns." This trend appears to underscore increased investor confidence in AI's transformative potential across various industries.

A surge in AI investments and valuations

In 2024, privately held AI companies globally secured over $100 billion in funding, accounting for a record 37% of all venture capital investments.¹ This influx of capital propelled an array of AI startups into new-icorn status with billion-dollar+ valuations. In fact, nearly 45% of all the early-stage startups minted unicorns last year were in AI or AI-related fields.²

In addition, a private AI basket of seven companies that Forge tracks has been sharply climbing, growing 58.3% in value from mid-2024 through January 31, 2025. This trounced the performance of the SPY index (that tracks the S&P 500), which gained significantly less over this period,³ setting an enthusiastic tone for private market AI investments in early 2025.

Generally, the surge in valuations reflects robust investor enthusiasm in AI, with average funding rounds for AI startups now exceeding $100 million.⁴

Notable AI new-icorns

Several startups have recently joined the ranks of AI new-icorns over the past few months. The following is a non-exhaustive list of some of the more recently touted AI new-icorns:

• Synthesia: UK-based generative AI media firm, Synthesia, reached a valuation of $2.1 billion after its recent funding round.⁵
• Mercor: AI-driven recruiting platform, Mercor, achieved a valuation of $2 billion following its latest funding round.⁶
• OpenEvidence: In February, AI health-care startup, OpenEvidence, raised funding from Sequoia leading to its $1 billion valuation.⁷
• Harvey: A San Francisco-based AI startup focused on the legal industry, raised $300 million in a February funding round led by Sequoia, which now values the startup at $3 billion.⁸
• Augury: A firm specializing in AI for manufacturing and industrial applications, successfully raised $75 million in a Series F funding round in February. This latest round has positioned the company’s valuation to exceed $1.04 billion.⁹
• Perplexity: An AI search startup aiming to challenge traditional search engines, Perplexity, has increased its valuation to $9 billion following a late-2024 funding round.¹⁰

Strategic investments in private AI companies by public market leaders

It’s not just venture capitalists and accredited investors making strategic investments in private AI companies. Established tech giants are also making significant investments in AI startups. For example, in 2024, Nvidia invested $1 billion in various AI ventures, solidifying its role as a crucial backer of emerging companies in the AI revolution¹¹ and helping it earn the moniker of AI ‘king-maker’ of the industry.¹²

Summary

The rapid ascent of AI new-icorns highlights the transformative impact of AI and the substantial capital fueling its advancement. While burgeoning valuations suggest solid market confidence in this sector, stakeholders must remain vigilant to ensure sustainable growth and avoid potential market bubbles. Yet, if the current trajectory of private AI company investing is an indicator, growth in this realm is likely to be an omnipresent private market theme through the rest of 2025.