2024 Future of Work 100

Welcome to Acadian Ventures’ second annual Future of Work 100, an in-depth ranking of the top 100 venture-backed companies building businesses that make work better, fairer, more meaningful, and ultimately more productive.  The Future of Work 100 has raised a cumulative $29.5 billion with a total market valuation over $140.3 billion.  

This year, we amended our methodology to include publicly available secondary market data.  We believe secondary market data is best representative of the current private company valuations and is in closer alignment with public company peers.

The result is a dramatic change in the number of unicorn companies, the total aggregate valuation, and the revenue multiples achieved by the companies on the list.   We are excited to share the top 10 companies in our 2024 Future of Work 100 and additional highlights from our research.

Top Highlights

The big reset is underway. This year’s edition of the Future of Work 100 revealed significant changes in the valuation of the companies on our list and the beginning of a long-anticipated reset in the market.  In last year’s Future of Work 100, the aggregate value of all companies on our list totalled $212 billion.  If you consider the last round valuation still being held at most companies, the aggregate valuation of all Future of Work 100 companies has slightly increased to $217 billion.  When you consider available secondary market data, combined with public market comparisons, the aggregate valuation has fallen to $141 billion, or a 38% decline over the last 12 months.

The “big reset” brings forth a market environment in line with historical means of ARR multiples and closer to comparisons in the public market.  In the 2023 Future of Work 100, the median revenue multiple was 19.8x.  Contrasting that to the 2024 Future of Work 100, the median revenue multiples have compressed to 8.0x.  

Several factors are contributing to the big reset over the last year including elevated inflation, rising interest rates, and uncertain regulatory environment.

The number of unicorns decreased significantly.  Across the three levels of categories – Unicorns, Rising Stars and up-and-comers –, Unicorns saw the biggest change in aggregate valuation, falling from $194 billion in 2023 to $109 billion in 2024. This can be partially attributed to the lower number of Unicorns in 2024.  Last year, there were 64 “Unicorns”, companies valued at over $1 billion, 20 “Rising Stars”, companies valued between $500 million and $1 billion, and 16 “Up & Comers”, companies valued under $500 million. This year’s version recognized 40 Unicorns, 32 Rising Stars, and 28 Up & Comers.  With 24 fewer unicorn companies this year, the number of Unicorns decreased 35%.  Interestingly, though with the decreased number of Unicorns, the median valuation of those unicorn companies rose from $1.6 billion in 2023 to $2.0 billion in 2024.

Revenue multiples revert to the mean. Rapidly rising revenue multiples, over the past few years, resulting from ZIRP, is now regressing. Overall, revenue multiples are down 60% from 2023. The top 20 companies in our Future of Work list have dropped nearly 70% and the multiple compression ranges from 44% to 60% across the respective categories. Several factors are contributing to revenue compression across the list including slowing growth, elevated inflation, rising interest rates, and uncertain regulatory environment.

Managing the delicate balance of growth and profitability. Over the last decade, with easy access to capital, startups prioritized “growth at all costs” at the expense of profitability. Companies were rewarded for their high growth often recognizing revenue multiples at 20x, 30x, 50x, even 75x. Venture capital-backed companies today are forced with a new reality of a more restrictive capital market combined with a more challenging market environment manifested in slowing growth.

The median growth rate has dropped from 100% on the 2023 Future of Work 100 to 30% in 2024 representing a 70% decrease over the last year.  The dramatic slowdown has forced companies to more tightly manage their balance sheet.  Slowing growth rates have not only impacted revenue multiples but it has also demanded companies to focus on free cash flow in order to survive.  The “Rule of 40” now requires more focus on profitability.  In the 2024 Future of Work list, the median cash flow improved over 66%.

‍European companies are holding strong. The 2024 Future of Work 100 showed Europe’s continued strength.  Companies based in Silicon Valley, where nearly a majority of the companies are headquartered, saw large drops in several key metrics including median valuation, which was cut in half from $1.5B to $765M, and its median revenue multiple, falling to less than a third of its previous value, from 23.8x to 8.0x.  Europe, on the other hand, held strong in these statistics. The continent’s median revenue multiple only went from 12.5x to 9.4x with the median valuation slightly dropping from $900M to $840M. One of the biggest differences between the European and the U.S. private markets is that secondary market transactions are less prevalent in Europe. U.S. companies can be traded on the private market, creating a riskier environment that causes more volatility, overvaluation, and uncertainty. Europe’s private sector, as a result, has less volatility and gross overvaluation than their U.S peers and more realistic expectations of valuations based more on company fundamentals.  This has certainly been visible in the year-over-year change between 2023 and 2024. With 20% of the companies on the 2024 Future of Work 100, these companies have impressed with their ability to survive and prosper in the recent compression of the market.

The AI revolution is in full force.  Future of Work 100 companies are quickly embracing AI.  In fact, 93% of the 2024 Future of Work 100 companies on the list incorporate artificial intelligence into their products.  Of these 93 companies, over half of those companies use generative AI while just less than 20% use both generative and non-generative AI. Oyster is one of the companies that use both forms of AI for tasks like data analysis, content generation, optimization, design, and more. Using both types of AI has been statistically shown to be beneficial, with ARR multiples higher than individual use. The median ARR multiple for generative and non-generative AI was 7.5x and 7.6x respectively while the usage of both rendered in at 7.9x. For average ARR multiples, generative was 9.5x, non-generative 7.9x, and a combination was 13.6x. Artificial intelligence is clearly the future of work applications, and we believe that the integration of AI into any product is existential.