Discovering Exceptional Startups Worth Over $1 Billion
The modern tech industry frequently buzzes with the term “unicorn” to describe privately-held startups valued above $1 billion. These companies have redefined success with innovation and colossal valuations. The term was popularized by venture capitalist Aileen Lee, driven by the notion that attaining such stature is as rare and wondrous as spotting a mythical unicorn.
Key Takeaways
- A unicorn is a privately-held startup with a valuation surpassing $1 billion, named for its rarity.
- Coined by venture capitalist Aileen Lee, the concept highlights exclusive ventures with exceptional growth potential.
- Prominent examples include SpaceX, Robinhood, and Instacart.
- The term can also apply in HR, denoting overqualified job candidates who seem unattainable, akin to mythical unicorns.
Understanding Unicorns
Embarking on the journey to becoming a unicorn, startups must captivate private investors or venture capitalists via pioneering ideas and scalable business models. Key exit strategies for unicorns include:
- Staying Private: Retention of control yet limited growth and investor returns.
- Going Public: Accessing significant growth capital through an IPO, though it dilutes ownership.
- Selling to a Buyer: Swiftly achieving growth objectives without the pressures of stock markets or prolonged private fundraising.
Historical Context
Originating from the fertile ground of the 1990s, the elite club of unicorns has fostered tech giants like Google and Facebook, climbing into the stratosphere of valuations. However, beyond tech, other sectors too see unicorns sprung from unlikely contexts such as the esteemed Airbnb for home-shares and Epic Games within gaming.
Extended Usage in HR
In HR circles, the hunt for unparalleled talent evokes the term unicorn to denote candidates with extraordinary matchups of qualifications and skills - often hard to find. For example, companies may errantly seek an individual who excels in marketing, social media, and management, stretching practicality for a single hire.
Demystifying Unicorn Valuations
High valuation in unicorns stems largely from projections of future growth rather than tangible present revenue. This exciting forward-looking stance allows investors to champion disruptive businesses even when profit margins are yet unrealized.
Unicorns in Technology
Lee’s vision in her article on unicorns, particularly targets start-ups intersecting technology sectors which have sky-high valuations potentially mismatched against more traditional financial metadata.
Revolutionary Unicorn Examples
Amongst the ever-expanding roster, a few transformative startups carve niche expertise:
Nuro
Harnessing the autonomous vehicle’s wave, Nuro, founded in 2016, created a futuristic space with delivery bots navigating zero-emission solutions powered by substantial SoftBank investments. Attaining $8.6 billion valuations by 2022, Nuro revolutionized robotic deliveries.
Instacart
Born in 2012, Instacart epitomizes convenience, complemented by heavy investments driving its valuation past multiple billions. Their proposition of transforming grocery shopping dynamics befitted numerous store partnerships, scaling widespread market embrace.
FAQs about Unicorns
What Is a Unicorn in Business?
Unicorns primarily reference startups with over $1 billion valuations.
How Many Unicorn Companies Are There?
As of 2022, more than 1,000 unicorns exist globally, collectively valued at about $3,516 billion.
Is Amazon a Unicorn Company?
No, Amazon, now public, started below the $1B threshold at its IPO in 1997.
Why Are Startups Called Unicorns?
Due to their rarity and explosive trajectory towards exceptional valuation statuses.
How Can I Invest in Unicorns?
Beyond reach for retail investors, unicorn investment prevails with private or venture capital clusters until potential IPO openings.
Related Terms: venture capital, business plan, IPO, technology startups, valuation.
References
- CB Insights. “The Complete List of Unicorn Companies”.
- TechCrunch. “Welcome to the Unicorn Club: Learning From Billion-Dollar Startups”.
- Benchmark Consulting. “5 Signs You’re a ‘Unicorn’ Employee”.
- Above the crowd. “Investors Beware: Today’s $100M+ Late-Stage Private Rounds are Very Different from an IPO”.
- London Business School. “Too Many Unicorns?”
- CB Insights. “Unicorn Hunters: These Investors Have Backed The Most Billion-Dollar Companies”.
- Ernst & Young. “In the world of unicorns, when is the right time to take the leap from private to public?”, Page 3.
- TechCrunch. “Learn How Nuro Co-Founder Jiajun Zhu Drove the AV Startup to an $8.6 B Valuation at TC Sessions: Mobility 2022”.
- Bloomberg. “Instacart Slashes Its Valuation by Almost 40% to 24 Billion”.
- CB Insights. “The Complete List Of Unicorn Companies”.
- CNET. “Amazon IPO Skyrockets”.
- Amazon. “About Amazon”.
