Do unicorns really exist?
This mythical animal is impossible to track down, yet unicorns do exist in the business realm. A unicorn is a start-up or a private company whose market value already exceeds one billion dollars or more, even though it is still a relative newcomer, still developing its business model. Unicorns are not listen on stock exchanges and their shareholders are rarely industry investors, but rather the company’s founders and employees, as well as venture capital funds.
Such companies are a rare occurrence – there are only around 300 among a myriad of all the start-ups all over the world.
The profile of unicorns
HRI reports that an average unicorn is 7 years old and its worth is 3.4 billion dollars. The value of unicorns altogether amounts to as much as 1.7 trillion dollars. What’s more, a one in four unicorns is either an e-commerce or a financial company. These are valued at over 523 billion dollars, which constitutes about 1/3 of all other startups that are worth at least one billion dollars. Cloud computing, artificial intelligence and new logistics solutions are also quite popular among unicorns. These companies account for 21% of the value of all businesses from the ranking. On the other hand, unicorns dealing with sharing economy, health and science constitute 14% of companies featured in HRI’s report.
Where do unicorns come from?
The most lucrative companies from the Old Continent usually develop within finance and e-commerce sectors. This means that in order to convince investors you do not need a breakthrough solution that’ll change the world. All you need is a service that significantly improves the lives of its users. Looking for inspiration? Take a look at the most valuable of European startups.
Europe is home to almost 12% of the world’s entire unicorn population. Here is a list of a select 10 of the most profitable European startups that achieved this majestic status.
- About you – a Hamburg-based startup, one of the fastest growing e-commerce companies in Europe, offering a personalized, mobile shopping experience. Valued at $1 billion after raising $300 million in 2018.
- Atom Bank – the UK’s first digital-only bank. It is a mobile banking application that offers a wide range of personal and business banking products. In 2018 the start-up raised $514 million, reaching a valuation of $1.25 billion.
- Bolt – known as Taxify in the past, this Tallinn-based start-up offers multiple transportation options including taxis, private drivers, and electric scooters. The company achieved unicorn status in May 2018 after it gained $175 million in a funding round.
- Cabify – the so-called “Spanish Uber” is also one of the biggest Spanish success stories. In 2019 the ride-sharing company closed an investment round at $160 million at a valuation of $1.4 billion.
- Confluent – an event streaming platform. In 2019 they raised a late-stage $125 million round at a $2.5 billion valuation.
- Monzo – this digital, mobile-only bank is becoming more popular thanks to its simplicity. At the end of 2018, the start-up passed the “unicorn” milestone after raising £85 million from US venture capital investors.
- N26 – Europe’s first completely mobile bank with a great number of financial products. At the beginning of 2019, it raised a $300 million Series D funding, bringing its valuation to $2.7 billion.
- Revolut – a UK-based fintech, launched in 2015 as an app-only bank. It joined the unicorn club in 2018 after a Series C investment round of $250 million, becoming one of the fastest companies in Europe to reach the unicorn status.
- Telegram – an instant messaging app created by two Russian brothers and well-known for its increased security measures. The start-up generated around $1.7 billion despite being banned in Russia and Iran, making it the world’s first ICO unicorn.
How to become a unicorn?
There’s no foolproof recipe for breeding a unicorn, nor a 100% sure solution. Many companies are still trying to copy the model of Israel’s famous Yozma, yet it seems that they’re not effective enough to replicate it successfully. The reason behind this is very simple: Yozma was launched in the 90s when it had no competition during its initial expansion.
Experts say that if a business is to become a unicorn, its owners needs a special entrepreneurial gene. Curiosity and passion are just as important. They inspire one to search for innovative solutions and make one persevere in their aspirations. Nevertheless, each new startup has a 0.006% chance of becoming a unicorn in the future, as estimated by specialists.
Take heart, you may still be successful! What matters the most is your dedication and passion for your business. Who knows, maybe your company will bolster the ranks of unicorns one day?