Source: CNBC
The private markets are revaluing pre-AI startups brutally. More than 220 former unicorns are now valued below $1B, and half have not raised capital in three years. This is a structural shift, not a cyclical funding drought. Founders built defensible positions in legacy commerce, SaaS, and infrastructure before generative AI collapsed the cost of replicating their features. They are trapped between their last high valuation and a much lower market clearing price. This creates a secondary market opportunity for acquirers and turnaround investors, but it marks a permanent reset for an entire generation of startups that mistook market tailwinds for durable competitive advantage.