This decade saw more than 200 startups hit $1 billion valuations. But the 2020s could be much less friendly for tech 'unicorns.'

• According to PitchBook data reviewed by Business Insider, 200 startups achieved valuations at or above $1 billion between 2010 and 2019.
• These billion-dollar businesses have achieved the "unicorn" milestone in fewer funding rounds in 2019 than in 2010, according to PitchBook data.
• But the unicorn heydays may be coming to an end. Several venture capital investors in Silicon Valley told Business Insider that 2020 may not be as big of a boom time for privately funded startups.
• Investors pointed to a potential economic downturn and industry uncertainty following disappointing exits like Uber and a rethinking of the growth-at-all-costs model, which tended to favor unicorn startups.
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The decade of billion-dollar private companies is coming to a close. And the next decade may not be so kind to young startups, investors warn.

In 2010, only 16 companies were valued at $1 billion or more. By 2019, that number had ballooned to 216, according to PitchBook data reviewed by Business Insider. The decade has been marked by rapid rises in the likes of Uber, Airbnb, and a host of other VC-backed startups promising to disrupt entire portions of the world economy only a few years after inception. The companies grew, garnering massive private valuations and delayed going public as long as possible.

In fact, since 2010, the number of funding rounds it took for a company to reach the $1 billion mark increased, even as more companies reached the threshold. Startups were staying private longer, and more kept raising venture capital at bigger and bigger valuations before entertaining the idea of a public offering.

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"The unprecedented run of massive late-stage private financings will dramatically slow. This will ripple down through the system, negatively impacting access to capital for private companies," Tribeca Venture Partners cofounder and managing director Chip Meakem told Business Insider via email.

As the decade wound down, companies like Uber, Lyft, and Slack tested that theory by going public via either a traditional IPO or direct listing. Neither strategy insulated the companies from outside scrutiny, and public market investors struggled to make the math work against high private valuations and meager, if any, profits.

"VCs will renew focus on tried and true tech sectors like software driven by a resurgent preference for high gross margin businesses," Meakem's cofounder, Brian Hirsch, said. "The IPO market will slow down considerably, but will be replaced by a surge in M&A as strategics find pricing to be more reasonable."

Going into 2020, many VCs are aligned with Meakem and Hirsch in preparing their portfolios for economic uncertainty that tends to accompany an election year. Add to that the longest bull market in history, and conditions are ripe for the end of the unicorn era, several investors said.

"We are testing any investment we make by asking, how would this stand up in a different economic market," Next Coast Ventures cofounder and managing director Michael Smerklo told Business Insider. "We're near the end of a bull market. There are ideas that are nice to have, but I don't know how they will do in the recession. We need to make sure the value proposition stands up regardless of the economic environment."

Many investors said they were looking away from high growth businesses in favor of less flashy software-as-a-service startups that could produce reliable revenue and potentially grow into a lucrative acquisition. The risky big bets that defined the 2010s may be well behind them, investors said.

"Gross margins don't lie," Smerklo said. "Selling a nickel for 10 cents is an interesting business model. Giving away product and hoping one day scale will make up for it, maybe Walmart and Amazon have mastered that, but not many others have worked over time."