Many have seen a shakeup coming this year to Silicon Valley's so-called "Unicorn" startups, those private startup companies like Uber and AirBnb that have a billion dollar valuation or greater. DoorDash Inc., a food-delivery startup that was seeking a $1 billion valuation when it began fundraising last fall, is reportedly now out of unicorn club as it finishes its investment round valued below that symbolic level -- and it may be the first of many.

DoorDash's Problems

DoorDash will not reach the $1 billion valuation it wanted in the fall, when it began the investment round that The Wall Street Journal is reporting is close to closing at around a $700 valuation, based on anonymous sources "familiar with the deal."

Investing houses including Sequoia Capital, YCombinator, and Khosla Ventures have reportedly decided to put up more than $110 million in the latest fundraising round, giving DoorDash a valuation of about $600 million for this round. According to the WSJ's sources, that's about the same price investors paid in the March 2015 fundraising round.

DoorDash was started in 2013 by students from Stanford university, based on a flat fee charge of $4 to $7 per delivery. Much like the Uber model, DoorDash uses independent contractors to deliver food, and has expanded to more than 20 cities. But unlike Uber, DoorDash entered later into a market that was already crowded with rivals like GrubHub, OrderUp, Muchery, and others -- and even Uber reportedly plans to expand into the food-delivery business soon.

On top of those worries, the company has reportedly been struggling with a high churn rate in its independent contractors, most of whom have left the company within a year of joining, according to a report from The New York Times last week.

That retention problem has led to increased spending on recruitment and referral bonuses, which may been negative indicators that helped scare off investors from the latest funding round.

Unicorn Startup Slowdown

DoorDash isn't unique in its funding problems though. As Latin Post has previously reported, experts on Silicon Valley startups have been lowering expectations, as $1 billion and higher valuations are becoming harder for startups to obtain from increasingly cautious venture capitalists.

DoorDash's latest funding round, not officially closed or announced yet, is just the latest so-called "flat round" of funding, but it wasn't unforeseen. The Wall Street Journal reported that in October, Sequoia Capital was reaching out with investors with confidence that DoorDash would hit the $1 billion unicorn valuation mark.

But in the ensuing months, as the outlook on big Silicon Valley startups began to sour, DoorDash and Sequoia reportedly both struggled to find enough VC funding to hit the $1 billion price.

A combination of shaky fundamentals and bad timing likely brought DoorDash down below its target unicorn price. At the same time other startups including once-lauded Jet.com have lowered valuation expectations.

What's clear is that a more skeptical VC community that's increasingly basing funding decisions on those fundamentals -- and on the importance of startups changing growth into sustainable, profitable businesses -- is already translating into fewer unicorns this year.