U.S. mutual funds are placing bigger bets on privately held companies to get a head start finding the next IPO superstar, a strategy that has yielded some dramatic payoffs and flameouts. Fast-growing private companies such as Uber Technologies, Pinterest and India's Flipkart Online Services have attracted billions of dollars in investment from U.S. mutual funds, marking an increase in overall pre-IPO betting over the past few years, analysts and fund managers said. It's a way to boost their returns and differentiate themselves from faster-growing index funds.

Funds run by Boston-based Fidelity Investments and Baltimore's T. Rowe Price Group, for example, more than doubled their money with pre-IPO bets on Facebook Inc. And shares of lesser known Zafgen Inc are up 15-fold since the Fidelity Select Biotechnology Portfolio made a pre-IPO investment of $11.2 million in late 2013. Zafgen's IPO was in June 2014.

"We're seeing more activity in the private market over the past few years as companies delay their IPOs and stay private longer," said Katie Reichart, an analyst at fund research firm Morningstar Inc. "It can be a big boost if they get in early. Mutual fund managers don't want to miss out on that runway to growth."

A comprehensive, industry-wide picture is difficult to track because mutual fund companies don't disclose their aggregate private company investments. Disclosures from No. 2 U.S. mutual fund company Fidelity, however, show that some of its biggest funds have more than doubled their pre-IPO investments over the past two years.

Of course, some pre-IPO bets have fizzled after companies made their stock market debuts. Twitter Inc was an IPO darling in 2013, helping Morgan Stanley's $2 billion Small Growth Company Portfolio generate a 62 percent return for investors that year. The fund invested in Twitter when it was a private company.

Twitter shares have tumbled some 46 percent since reaching $69 a share in early January 2014. Last year, the Morgan Stanley fund lost 10 percent, partly because of Twitter's plunge, while peer funds posted an average return of 2.4 percent, according to Morningstar. Morgan Stanley declined comment.

Andrew Boyd, who oversees private company investment for Fidelity, said the pre-IPO market has become the IPO market of the past, but it's only available to investors such as venture capital firms, mutual funds and hedge funds able to put up large amounts of money that once were only available through public markets.

Before, rapid growth might happen after a company's initial public offering. But now, much of it is happening before the IPO as the pre-IPO financing allows companies more time to mature and get bigger out of the public eye. From companies looking for capital, Boyd said, "We hear that constantly over and over, 'We're just not ready for the limelight of (being) a public company. But we need capital!'"

Once Fidelity invests it also holds regular meetings with companies to see if they can make accurate quarterly projections and handle tough questions from skeptical fund managers, Boyd said. "Finishing school isn't a bad way to think about it," he said.

As a result, a company like ride-sharing service Uber may make its stock market debut with a value of more than $50 billion. By contrast, Google Inc's market capitalization was only about $23 billion when it went public in 2004.