The explosive success of a few Facebooks and Googles of the world was rare back in the days and companies who can reach this milestone valuation are as rare as unicorns, hence the name. Venture capitalist, Aileen Lee, the founder of Cowboy Ventures, coined the term “unicorn” in 2013 to describe any private company valued over US$1.0 billion.
Unicorns are not as rare as they were in 2013 but it still takes a lot of hard work to join the herd. There were 39 unicorns on the list in 2013 and as of June 2022, there are almost 1,200 active unicorns globally. Even bigger variations of unicorns have popped up since the birth of the original term i.e. Decacorns- valued at more than US$10 billion and Hectacorns- valued at more than US$100 billion.
Who are the Biggest Unicorns in the World?
In terms of valuation, the top unicorns in the world are ByteDance (last valued at US$360 billion) follow by Ant Group (US$200 billion), Stripe (US$152 billion) and SpaceX (US$100 billion) according to PitchBook data.
The valuations of the largest unicorns are particularly susceptible to the fluctuations in the stock markets. Facing a selloff of tech stocks in 2022, many of the most valuable tech startups are expected to struggle to maintain or increase recent valuations.
Top Unicorn Investors
Unicorn is a venture-backed company that would not reach their success without the investors and venture capitalists backing their businesses. The top three investors are Tiger Global Management with 155 investments followed by SoftBank Investment Advisers and Coatue Management with 96 and 78 investments in unicorns, respectively.
Below is the list of the top investors along with the number of unicorn companies that they have invested in:
Source: www.hubspot.com
Unicorn Companies by Location
The United States housed more than half of the world’s unicorns. As of June 2022, United States has about 662 unicorn companies (54% of the global total) whilst the Chinese unicorns are the second most common at 212 unicorns followed by India (68 unicorns), United Kingdom (37 unicorns) and Germany (25 unicorns).
European unicorns have become much more common, representing nearly 18% of all new billion-dollar VC-backed companies in 2022.
Source: www.hubspot.com
Unicorn Companies by Industry
To date, software still dominates as the number one industry amongst the unicorn companies. Software-based companies range from fintech-focused Webull to DIY design company Canva.
Other top industries include commercial services, retail, and transportation. The breakdown of the top unicorn’s industries is listed in the chart as follows:
Source: www.hubspot.com
How has Unicorns becoming a Commonplace
Tech companies have become household brands and are contributing to the unicorn boom in many parts of the world. While work from home during the pandemic has fueled the growth of digital businesses globally, large smartphone user base, digitization of commerce and thriving digital payment ecosystem has also greatly contributed to the booming of unicorns recently. Besides fintech, e-commerce grocery, SaaS and marketplace players are contributing the most to the unicorn universe.
According to PitchBook data, approximately 8% of all companies that received VC funding globally were valued at $1 billion or more in last year alone. The fact that so many funding rounds now involve billion-dollar companies is due in part to the growth in Venture Capital fund sizes.
Several late-stage investors, most notably SoftBank, have their tech investment strategies built exclusively around supporting and backing companies that are valued at more than US$1 billion.
Nonetheless, due to increasing competition especially in the later-stage of the funding round, some of these investors are moving into earlier stage of the deals to foster good relationships with prospective unicorn companies in hope for getting a better cut or deals in the later rounds.