Yes, it’s true… unicorns are real!

No, they don’t have four legs. They don’t have horns, either. In fact, they’re not even an animal…

But one thing is certain: They didn’t exist a few decades ago. And now, they’re rising in number.

Okay, quit teasing me… what’s a Unicorn Company?!

 

These days, the term “unicorn” – or should we say, “unicorn company” – refers to any privately-held start-up company worth more than $1 billion.

Okay… so they’re not exactly what you had in mind (or have always dreamed of, if you’re like some of us)… but they are pretty cool nonetheless. Most unicorns are tech companies, and they’re typically small – but are powered by big ideas.

And, as we mentioned, the concept of “unicorns” in the tech world is still relatively new – in fact, the term “unicorn company” was coined in 2013 by Venture Capitalist Aileen Lee. The vast majority of these companies have used the internet to achieve unprecedented growth, which is why we’ve only recently needed a name for these explosive start-ups.

Why are they called “Unicorn Companies”?

Because they’re rare, of course! (And let’s be honest, “four-leaf clover company” doesn’t have the same ring to it.)The number of unicorns has grown in recent years. According to Google, there were 465 unicorns as of April 2020. But there have been many more in the (recent) past… they simply lost their unicorn status by going public. A public company worth $1 billion is nothing to scoff at – but it’s not nearly as impressive as a company that has pulled itself up by its own bootstraps.

What are some examples of Unicorn Companies?

Some well-known former unicorns include Facebook, Snapchat, Uber, WhatsApp, LinkedIn and more.

Right now, the current top 10 unicorn companies (by valuation) are:

• Toutiao (Bytedance): Artificial Intelligence company based in China. They’re worth $75 billion.
• Didi Chuxing: Auto & transportation company based in China. They’re worth $56 billion.
• Stripe: Financial technology company based in the USA. They’re worth $36 billion.
• SpaceX: Space technology company based in the USA. They’re also worth $36 billion.
• Palantir Technologies: Data management & analytics company based in the USA. They’re worth #20 billion.
• Airbnb: Travel & accommodation company based in the USA. They’re worth $18 billion.
• Kuaishou: Mobile & telecommunications company based in China. They’re also worth $18 billion.
• One97 Communications: Financial technology company based in India. They’re worth $16 billion.
• DoorDash: Supply chain, logistics, & delivery company based in the USA. They’re also worth $16 billion.
• Epic Games: Video game company based in the USA. They’re worth $15 billion.

Why are unicorns important?

Paying attention to unicorns as they appear can help you identify emerging trends. Unicorns often rely on (and even create) cutting-edge technology that has the potential to completely change the world. Just look at the companies listed above… Facebook, Uber, Airbnb and the like have become a part of life.

In addition, investing in these unicorns before they reach their peak can mean major windfalls for smart investors. For most of us, it’s simply interesting to see small companies make big change in the world. Unicorns couldn’t have existed 50 years ago… but now, with the internet connecting us all, we’re able to reward great ideas to a degree never seen before. Here’s to many more unicorns!