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Who are unicorn startups and why follow them

Updated: Feb 7

Ilona from VF

Date of publication: 02/07/2023

There is such a thing as unicorn startups. However, the comparison of startups with a mythical creature is not accidental. Actually, it emphasizes their uniqueness. The chance of becoming a unicorn company is about 1%, we will return to this statistic below. But still there are entrepreneurs who strive for the status of a unicorn.

Who are unicorn startups and how they differ from other companies

The term "unicorn" appeared in 2013, when Eileen Lee, founder of Cowboy Ventures, used it in her article. Back then, unicorns were considered companies that reached a $1 billion valuation. Now there are different criteria by which startups are evaluated and added to the list of unicorns.

Criteria for a Unicorn startup

A company is usually considered a unicorn if three conditions are met simultaneously:

  • The company is private and relatively independent. For example, a startup is not considered a unicorn if it is owned by a large corporation.

  • It has reached a valuation of $1 billion.

  • It hasn’t entered the exchange market.

These criteria are conditional. For example, we used to look at the age of a company. Roughly speaking, if a company suddenly became worth a billion, but it is already 20-30 years old, it can hardly be considered a unicorn. Now this criterion is usually ignored. On the other hand, in recent years, only young companies have become unicorns.

The status of a unicorn is not the end point for a company. In fact, it can be lost. If this happened according to a positive scenario - due to going public or selling a startup - then nothing will change. The company will continue to work and develop, it will simply cease to be considered a unicorn.

unicorn startups

Example of a Unicorn Company

For instance, Uber in just six years became the most expensive unicorn with a capitalization of $62 billion. Also, already in 2019, Uber went public and immediately sold 180 million shares. Now the company is no longer a unicorn, but this doesn’t prevent it from making ambitious plans. For example, Uber aims to be the greenest taxi aggregator in the world. But it happens that a startup ceases to be a unicorn when its valuation falls below $1 billion, and this affects the attraction of investments. Investors are more likely to invest in a consistently growing startup rather than one whose valuation has decreased from a billion.

What is the current count of unicorns existing in the world?

As of January 2023, more than 1,200 unicorn startups were counted around the world. Moreover, some of the unicorns cost more than 10 billion dollars, they are called decacorns. And some cost even more than 100 billion - these are hectacorns.

Research by CB Insights In terms of statistics, the chance of raising your own unicorn is small. So, in 2018, CB Insights purposefully followed a group of 1,119 startups. After six rounds of investment, only 12 of them became unicorns, that is, about 1% of companies.

Why follow unicorns and how it can help grow your business

There are three reasons why it is important to track changes in the unicorn startup environment:

Identify economic trends

Unicorns are a marker that reacts to any changes. If you watch them, you can choose a promising niche for your own business. This is what taxi services did after the advent of Uber. First, one large successful company appeared, and then its counterparts in different countries.

Find successful business solutions


Unicorns are a combination of accidents in the development of the market and successful decisions of the company. For example, the pandemic has given a major boost to the health and delivery industry. Therefore, companies have begun to create products that meet new needs.

Successfully invest

If a sector of the economy is growing rapidly, there are definitely small but promising companies in it. You can invest in "future unicorns" right away or wait for them to enter the exchange market.

The emergence of a unicorn company in a new niche means that it most likely has several competitors in which to invest. Or perhaps a company with the same business model appears in another country - you can also invest in it.

At the same time, simply tracking changes in the lists of unicorns is uninformative. It is more efficient to study trends, read news and analyst reports in parallel. However, doing it on your own takes too long. For this reason, there are special analytical portals - unicorn maps - that track promising startups and collect brief information about them. The most famous and complete:

  • CB Insights is a tracker site that collects information about startups and compiles a list of unicorns.

  • Dealroom - reports on the status of startups, investments and innovations.

These reports are used by such media as The Economist, Financial Times, BBC and The New York Times.

  • Crunchbase News is a site with news from the world of startups.

Estimates may vary in different sources due to the specifics of methodologies, but unicorn maps still remain a guide for entrepreneurs and investors.


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