There are very few!
Unicorn start-ups are rare and therefore the most sought after.
The innovation and ideas of a company can lead a group of young people to develop businesses that eventually become the most valued in the world. This is not new; it was previously achieved by Microsoft or Google. Today, a new term has been coined to define these companies that reach great market value: the unicorn start-up.
What is a unicorn start-up?
The unicorn is a mythical and legendary creature. In mythology, it was a white horse with a horn on its forehead, always portrayed as an untamable and free being that was very difficult to capture because its kind was very scarce.
This is the term used in 2013 by Arleen Lee, founder of Cowbay Ventures, to define those companies that, because they are rare, exceed 1,000 million dollars in value before going public. This value must have been reached within the first 10 years of the company's operation.
Like unicorns, they represent only a small percentage of the companies created daily worldwide. In 2013, according to data provided by Lee, there were 39 unicorn start-ups, mostly located in San Francisco (United States).
These companies appear in the era of social networks and take advantage of their momentum to grow their businesses every day. The most famous case in this regard is Facebook, which reached a value of 100 million dollars. These are companies that create a strong social influence.
They are called B2B companies, that is, they develop a commercial strategy that reaches the final public, which in this case will be the client or consumer. They are able to attract new talents from all over the world to work for them and are capable of generating incredible profits.
Profitable companies that have grown in the last decade
These companies are truly profitable for investors since it is estimated that each private investment in one of these companies increases up to 26 times its value for every dollar invested. This is extremely unusual and not all created companies can achieve it. In the past decade, around 4 unicorn companies were created on average per year.
Therefore, the number of companies of this type has begun to grow in recent years, rising from 39 registered in 2013 to 197 in 2017. This has led some experts to consider that the term has become insufficient and they now speak of superunicorns. These special unicorns are those start-ups that exceed 10,000 million dollars in value before their market launch.
These 197 unicorn companies are currently divided into 13 sectors called verticals, which include companies in ecommerce, big data, Internet software and services, mobile software and services, cybersecurity, social fintech, on-demand, media, health, hardware, properties, and others.
The vast majority of these companies are in the United States, according to 2016 data: 101 were in California, 23 in New York, 33 in China, and 13 in Europe.
As a curious fact, most of them were created by young entrepreneurs; the average age of the first founders was around 34 years. On the other hand, they are generally formed by groups of three people who have some relationship with each other (90 percent of these founders already knew each other, being friends in school or university). Furthermore, female representation in this type of company is much lower; there are only two unicorns founded by women (Gilt Grape and Fab).
