2017年2月27日Unicorn, US (148) and China (69), followed by the U.K. (10), India (9), Israel (5) and Germany (5). Revisiting The Unicorn Club
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39 companies in the U.S fitting the definition.
6 of them in the U.S.
43 exited unicorns as of February 25th, 2017.
the original article by Aileen Lee. I thought it might be interesting to revisit the topic today, and explore what unicorns from around the world have in common and what differentiates them from each other.
“unicorns” that carries as much information as possible. This list includes all startups co-founded since 2003 for which the latest post-money valuation is either equal or over $1 billion, including those that are publicly traded or acquired.
You can see a quick snapshot of the dataset below:
Before jumping into the analysis, it’s worth noting a few things:
- First of all, this list, while being quite extensive, is by no means comprehensive, and it’s quite possible that I’ve still missed some companies.
- January 27th, 2017
- Finally, as it’s based on publicly available information, it is possible that certain numbers are incorrect or outdated
Theranos and a few others): unless there was a formal down round, or the company is publicly traded, the valuation used for the purposes of this analysis is still the one the company received in the most recent round.
Klarna is one example) and are supposedly worth much more today than they were during the last round of financing. While this might skew the numbers a bit, I see no way to objectively adjust these valuations, which is why I’m sticking with confirmed valuations.
With that said, let’s now jump straight to the analysis.
Overview
ivingSocial are just a few names that immediately come to mind).
That being said, below you can see the distribution of unicorns by the year they were founded, as well as the average valuations for each year. Unless otherwise noted, I’m using the latest confirmed valuation to calculate the averages; for publicly traded companies, that means using the latest market cap.
founded in 2013 or later just haven’t reached the unicorn status yet.
2–3 years to get there.
Uber was founded.
below $4 billion for any particular year.
Hulu). While those companies might seek outside funding and generally operate independently from their parent companies, one might claim that they still have an “unfair advantage” over other startups and should therefore be excluded from the analysis.
subsidiaries of larger corporations.
the valuations of over $1 billion were widely reported, but never confirmed by the companies or their investors.
exclude all of those for a moment and look once again at the distribution of the startups by the year they were founded.
the average valuations are slightly lower for most of the years.
The Unicorns, and Where to Find Them
Now let’s take a look at the geographic distribution of the unicorns:
Germany (5).
33 companies, including companies founded in Russia and Israel).
New Zealand.
Rocket Internet spin-off.
Now let’s take a look at the average and median valuations by country:
Supercell).
Skypedriving the valuations up).
much lower down the list in terms of median valuations (which makes sense given the sheer numbers of startups originating in those two countries).
at least one unicorn.
JetSmarter based there.
higher valuations.
Unicorns by Sector
First of all, an important caveat: this is perhaps the most difficult and ambiguous part of this post, as it requires using your own judgement to classify the startups based on the space they are operating in, which by definition makes it highly subjective.
In order to at least partially mitigate the risk of improper classification, I went with rather broad categories wherever possible. Although this somewhat limits the possible depth of insights that can be drawn from this analysis, I believe that it’s a reasonable trade-off in this case (although even then, classification remains a significant issue, especially considering that many startups can theoretically fall under several categories).
Airbnb fall into this category.
($3.0 billion).
E-Commerce ($2.7 billion).
$4.7 billion.
Hardware.
#2 (37 companies).
the largest space in terms of the number of startups.
$408 million in average funding.
The Investors
Now that we’ve looked at the unicorns’ themselves, let’s take a peak at who had the most luck investing in the unicorns so far.
Crunchbase. This means it’s not necessarily exhaustive or up-to-date. In order to perform analysis for this section, I used information about lead investors for the companies in question.
Unfortunately, sometimes the company or the investors chose not to disclose who led the deal, or the information in public sources might actually turn out to be wrong. Therefore, while the rankings you can find below are most likely to be largely accurate, I’d caution anyone from paying too much attention to the exact numbers.
41 unicorns so far.
Tiger Global Management (15 investments).
a lead investor at least in one of the financing rounds for a particular startup.
8 unicorns.
Now, while those numbers are interesting, over the last years, quite a few funds have done some very late stage investments in the unicorns. For some of them, doing growth stage/late stage investments has always been part of the strategy, but many have chosen to do those deals in order to be able to add already famous companies to their portfolios.
While this strategy isn’t necessarily bad, it’s hard to expect it to provide the returns that are as high as someone who invested in a successful company at the earliest stages might expect to enjoy (again, it can actually be the case that the late stage investors enjoy better returns than the early stage ones, but for the sake of argument let’s assume that this is generally not the case with most of those companies).
Series A/B/C investments.
(14 companies).
Alibaba). This obviously means that early-stage investments are generally not part of their strategy.
in all 14 unicorns it ended up investing in (which isn’t particularly surprising given that it’s an early-stage focused fund in the first place).
Exit Opportunities
the exit opportunities for the unicorns. For the obvious reasons, those are perhaps the most important thing for the investors, as it is ultimately the exit price, and not the private valuations in subsequent financing rounds, that determines the returns for the investors (unless, of course, you somehow manage to negotiate selling your stake in a secondary transaction in one of the later rounds).
acquired.
Let’s first take a look at the acquisitions’ numbers:
1.5 years since being founded.
subsidiary/JV category, so it’s excluded from the 3rd chart at the beginning of this post).
7 acquisitions respectively.
E-Commerce. Not a single company from any of the other sectors has been acquired so far.
Whatsapp acquisition.
$5.9 billion.
Now let’s move to the publicly traded companies:
’s public offering).
2008. Unfortunately, it turned out to be very hard to uncover IPO valuations for either of those.
raise funding on the private markets (the abundance of venture capital, especially in 2015, also helped).
E-Commerce sectors we’ve seen on the acquisitions chart.
Conclusion
This is by no means a comprehensive analysis of the “Unicorn Club”, but I hope it provides at least some interesting insights into this very peculiar market.
In just 3 years, the number of unicorns has more than tripled (274 today vs. 83 in my initial dataset from 2014). Is it a good thing that so many companies are now boasting the valuations that were almost unimaginable just a few years ago? Maybe not, and I’m pretty sure that some of the companies featured in this analysis might witness their valuations taking a significant hit in the near future.
Softbank’s $100 billion fund underway), we will probably see even more companies reaching the “unicorn” status in the near future. Therefore, it might be interesting to revisit this topic and run similar analysis in another 3 years, and see how the market will change. Hopefully, someone will do it; one can hope.
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Added: I was reminded that it might not be a good idea anymore to call the startups worth over $1 billion “unicorns”, considering that there are close to 300 of such companies now. I wholeheartedly agree that this term doesn’t make much sense at this point. The only reasons why I decided to stick with it in this article is because it’s widely recognizable today and in a certain way it helps to establish the connection with the previous examinations of the world’s most expensive startups.
Also, please see a couple of of corrections highlighted by the readers below.
It turns out that there is at least one company in South America that qualifies under the definition of “unicorn”: Argentina-based Globant was founded in 2003 and is publicly traded now, with the market capitalization of $1.23 billion.
Powa Technologies’ valuation of 2014 turned out to vastly exaggerated by the company. In 2016, the some of the core businesses of Powa were sold off, and the company ceased its operations. Another company that might no longer belong to the list is NJOY, which filed for bankruptcy in September 2016.
If there are any other things worth highlighting, please don’t hesitate to reach to me, and I’d be happy to correct those!