An extract from an article named “The secrets of unicorn companies” published by Wired, states that we have entered an era seeking to create unprecedented value creation which has given birth to the concept of a unicorn company- a company having a valuation of a billion-dollar or more.
A Unicorn startup company is a private company, having a post-money valuation of $ 1 billion or more. A unicorn company refers to a startup or a private company with a valuation exceeding $ 1 billion.
A unicorn company’s nickname came from a Venture Capitalist, Aileen Lee, who coined this term in 2013. This is not merely a dream. Some of the most beautiful products like Slack have almost exploded the gates, only adding to this label’s mystique.
Many companies have reached the $1 billion mark, and some have even exceeded this requirement.
CB Insights continually keeps track of the unicorn companies in its database, The Global Unicorn Club. Currently, in the list of July 2020, 488 companies have been listed as unicorn companies by CB Insights. This list includes whisper valuations. These evaluations are made by analysts and are simply the estimates of a firm’s value, which is unpublished. These companies have a combined valuation of $1524 billion in August 2020.
As of September 2020, more than 500 unicorn companies have been recorded all over the world. Some of the variants of a Unicorn company are 1. Decacorn (Valuation of more than $10 billion) and Hectocorn (Valuation of more than $10 billion).
The definition of a Unicorn company is reserved for those startup companies that are looking forward to significant growth.
What is the reason behind the growth of a unicorn company?
So, why have these startups risen dramatically? The primary reason that has increased their popularity is the increasing convergence between the public and private markets. Earlier, the companies had to rely on initial public offering to increase their scale of operations. Thanks to the increasing trend among the companies to raise capital through private funding, they have permitted them to reach more than $1 billion.
Investors these days have more cash in hand in venture capital, and they are ready to place their bet on a promising unicorn startup. Let us take the example of Nuro, an automotive startup. It was founded in 2016, and it has already raised a funding of $1 billion, which resulted in a $2.7 billion post-valuation for this company. Around $940 million of money was given by a huge tech giant SoftBank who has played the role of an investor in the venture capital space. Not only this, but SoftBank has also been declared one of the largest private market fund investors. It has also invested in many other renowned unicorn companies such as Uber, Slack, WeWork, and many more startups.
As the investors observe more and more growth and profit in the unicorns, they are looking forward to giving more money in the private markets. Investments in private markets have increased incredibly. This means more high-valued startups are going to emerge in the coming years.
The U.S. is the winner in giving birth to the highest numbers of Unicorn startups, followed by China.
The top 5 significant industries preferred by Unicorn startups are W-commerce/marketplace, Healthcare, On-demand, Internet Software and services, and Fintech.
Renowned/Top 10 Unicorn Companies
Let us discuss some of the most notable unicorn companies located all over the world.
Automation Anywhere (automationanywhere.com)
Dedicated to assisting the companies in transforming how they can automate even the most complex business processes, Automation Anywhere is a classic example of automating business processes across all industries smoothly. They use robotic automation processes that can be implemented in almost any industry, such as insurance, healthcare, technology, and even financial services.
Founded in 2003, Automation anywhere has total funding of $550 million. Some of its investors include New Enterprise Associates, Goldman Sachs, and Softbank Vision fund.
They have pioneered personalized consulting, enterprise-grade cognitive robotic automation processing, detailed reporting, swift and seamless onboarding, unparalleled security, and regular bot monitoring.
Making quick food deliveries to customers from boutique restaurants is the main idea behind the success of Doordash. Founded in 2013, DoorDash has total funding of $971.8 million. Some of its major investors include Y Combinator, Khosla Ventures, Kleiner Perkins, Sequoia Capital, DST Global, and Coatue Management.
DoorDash enables local food businesses to reach a more extensive customer base with on-demand delivery services. The customers can enjoy their all-time favorite food from the most demanding restaurants as and when required.
The service highlights of DoorDash are Real-time order tracking, easy ordering, app-enabled, promotional offers, a large variety of menu options, widespread availability, and on-demand delivery service.
Located in Santa Monica, California, Bird is a company that has successfully filled the void for on-demand and environment-friendly transportation systems all across U.S. Former Lyft and Uber executive, Travis VanderZanden founded this Unicorn startup in 2017.
Bird has received a total funding of $415 million. Its investors include Goldcrest Capital, Craft Ventures, Valor Equity Partners, Index Capital, and Sequoia Capital.
On-demand user based task completion, convenience, entirely fitting the current municipal infrastructure, and clean automobile transportation alternatives are the major highlights.
Using the reliable and technology-based ecosystem of drivers, Convoy helps companies is shipping freight easily. Convoy helps carriers select the right jobs to streamline payments, improve the supply chain’s operations, and reduce the drive time.
Founded in 2015, Convoy has total funding of $265.5 million. Greylock Partners, Y Combinator, and Capital G are its investors. The Convoy’s primary service highlights are app-enabled bookings, real-time 24/7 GPS tracking support, and actionable data for cost-effectiveness.
To support the gaming community, the Discord app allows free, secure, and reliable communication. Discord supports a vast number of gaming platforms. It helps in creating close-knit, easy to communicate gaming groups.
Founded in 2012, Discord has total funding of $129.3 million. Tencent Holdings, benchmark, 9+ Program, Greylock Partners, and index Ventures are its investors. The major highlights of this app are that it has multi-platform functionality, is free for the users, and has an easy text/voice/video-enabled chat.
A piece of good news for the Cigarettes and Cigar smokers, JUUL, is an electronic company offering vaporized tobacco alternatives. Their primary aim is to eliminate the consumption of combustible cigarettes. Smokers worldwide can make a permanent switch.
Founded in 2017, JUUL has total funding of $761.5 million. The major highlights of this electronic company are that it causes no adverse effect on health. In addition to this, reusable devices, compact and convenient design, a reasonable alternative to combustible cigarettes, and high-standards make this company a successful venture.
The primary goal of lime is to reduce dependence on personal vehicles when traveling shorter distances. The innovative concept of lime revolves around offering shared scooters, bikes, and transit vehicles to the customers to save the planet from the harmful effects and create a positive impact on the earth.
Founded in 2017, Lime has received total funding of $467 million. Andreessen Horowitz, Couture Management, Rainbow Technologies, Fifth Wall, and GV are its major investors. The main highlights of lime are that it is keen on generating a clean automobile alternative for the customers, on-demand real-time transportation alternatives, and cardiovascular exercise.
Operating in almost 44 major metropolitan markets of the US, Postmates has an on-demand delivery fleet operation. With its delivery services to all the categories, including retail businesses, convenience stores, restaurants, many others, Postmates got total funding of $578 million. Spark Capital, Harmony Partners, Founders Fund, Tiger global management are its investors.
Founded in 2012, Postmates is an app-enabled delivery platform with varied plan options spread across the United States.
Boosting 16 million games created by its users, Roblox is a creative gaming platform where its users generate innovative games. It is the best gaming site for both the kids and the teens that look forward to fostering creativity with immersive and virtually appealing 3D environments. Altos Ventures, First round capital, Meritech Capital Partners, Index Ventures, Tiger Global Management, and Greylock Partners are its investors.
Founded in 2004, Roblox has total funding of %185.7 million. Multi-platform compatibility, free availability, and games generated as per the user’s age are its major highlights.
With an excellent Robotic Automation Solution, UiPath helps companies worldwide automate and manage critical enterprise tasks and solutions.
The automated software solutions of UiPath are tailored to offer quality solutions to the companies in various fields such as manufacturing, telecom, healthcare, insurance, BPOs, finance, banking, and shared service industries. Earlybird Venture Capital, Accel, Sequoia Capital, Capital G are its investors.
Founded in 2005, UiPath has a funding amount of $448 million. With its quick and tailored solutions, UiPath has successfully created a strong impact in all the fields.
Now that we are halfway through 2020, let us look at some of the latest data reports on the unicorn companies. Four new unicorn companies (CourseHero, ApplyBoard, Udemy, and Quizlet) have entered the league with other leading industries. Also, software service companies such as Figma (design collaboration), Notion (workplace collaboration), and Podium (local customer communication) joined the list of leading unicorn companies.
We can see that online education and software services have emerged as a new unicorn company concept, while branded e-commerce companies and fintech have taken a back seat in the year 2020 so far.
New Unicorn Company cohort of 2020
The new addition to Unicorn Company 2020 has brought the list to more than 601 companies. These unicorn startup companies are valued at $2 trillion, and they have successfully raised $442 billion. These evaluations are based on publicly available data and various media reports.
Just a year ago, in 2019, the unicorns had been valued at $1.6 trillion, and these aggregates collectively included 452 unicorn companies.
In 2020, the most high-valued unicorn companies are Indian biotech company Biocon Biologics, U-S based driving solutions company Pony.ai, and U.K. based tech electric vehicle company Arrival. Each company is valued at $ 3 billion or more.
Leading industries that attract unicorn companies
There are a few sectors that are primed for a unicorn startup to enter. A unicorn startup can enter into any area, from robotic tech process automation to real-time on-demand transportation solutions.
Following the successful startup venture Uber’s footsteps, many companies seek to make transportation more convenient for their users. For instance, competing brands like Bird and Lime have successfully crossed the $1 billion mark. The users of both companies can make use of the mobile app.
Similarly, Convoy, a Seattle-based company, has revolutionized the idea of freight. When it comes to loading and unloading or transporting, Convoy ensures that its intuitive mobile design helps its users stay on schedule.
Unicorn startups like AmazonFresh, UberEats, and GrubHub make sure that fresh, high-quality, delicious meals are served at your doorstep. Postmates and DoorDash delivery services are also added to their team. These newcomers have entered into partnerships with the local restaurants and the local drug stores and grocery stores to deliver just about anything to your doorstep.
Playing video games is always fun. But these days, it has become profitable too. Thanks to all the emerging technology, it has become just a matter of click for game lovers to create their innovative games.
For instance, a free and popular game Fortnite has taken the world by storm. Its creator- Epic Games, is a unicorn company. Another example of a company that has crossed a mark of $ 1 billion in- Discord. This company has set an excellent standard in the gaming world, which has won them a unicorn company’s nickname. Roblox is another such company that has created an easy and convenient platform for the game lovers to develop their innovative games. Users can create any game of their choice and share it amongst their friends.
The business technology automation platform will continue to become popular among the unicorn companies in 2020 as companies are searching for more innovative processes, competitive edge, increased productivity, and efficiency. Automation Anywhere and UiPath are the perfect examples of businesses consistently striving to appear on the list of top 10 unicorn companies worldwide.