what is the meaning of a unicorn company?
A unicorn is a privately held startup company which is valued at over $1 billion (currently equivalent to around £760m).
Such companies are classified as unicorns due to the rarity of startups who achieve this significant success and still remain private.
where does the term ‘unicorn’ come from?
Aileen Lee coined unicorns, referring to them in her 2013 article ‘Welcome to the Unicorn Club: Learning from Billion-Dollar Startups.’ At the time, she was a year into her role as a founder and managing partner of Cowboy Ventures.
how many unicorn companies are there in the uk?
There are currently 16 unicorns in the UK, with CMR surgical being the latest to attain a billion dollar valuation.
A further five UK unicorns have now now exited, with one unicorn dead.
unicorn companies are no longer so rare
But six years after the term first entered the startup lexicon, $1b companies are no longer so rare.
Current figures report between 190 to 220 such businesses in the United States and between 390 and 500 worldwide. In light of this growing population, the meaning of the term “unicorn” becomes increasingly diluted; instead of elusive and solitary, these startups are becoming ever more common, with whole herds of unicorns cropping up around the world.
Whilst the US and China are rapidly breeding ‘mega-herds’, the UK is building its own collection of $1b companies at a more steady rate.
We’ve confirmed 16 active unicorn companies headquartered in the UK, with an additional five that have exited. One UK company, Powa Technologies, achieved unicorn status before it fell into administration.
Other companies are rumoured to have surpassed the $1b valuation mark, but have not yet confirmed this to the media or through their financials.
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We refer to these companies as ‘invisible unicorns’ — they’re out there but are currently in hiding.
companies are reaching billion dollar valuations faster
As we’ll see in later chapters, companies are now reaching unicorn status at a faster rate than ever before. This has been driven by the maturing venture capital industry, which continually pumps funding into the world’s most promising and high-potential enterprises in the hopes of generous returns on their investment.
But other support systems have also been instrumental.
For example, many British unicorn companies have also benefited from grants, attended accelerator programmes, or secured venture debt in order to help them scale.
Early access to large amounts of capital, plus mentoring and business connections provided by various support mechanisms allows startups to expedite their growth, demonstrate their potential and secure colossal valuations at a very young age.
why are unicorns companies interesting to look at?
In a well-balanced and diverse portfolio with multiple businesses that may fail to make an exit, one multibillion dollar exit will mean the portfolio is still likely to make a significant return.
This is why many early-stage, risk tolerant investors are on the hunt for future unicorn companies to put their money behind.
And what better place to look for the tell-tale signs of a unicorn than by examining the herd as it stands now?
what this report covers
This report examines these growth journeys and identifies key trends between them.
Starting with an analysis of the UK’s active unicorn herd, we’ve also investigated the companies that we suspect are ‘invisible’ unicorns, and those up-and-coming startups that we can reasonably anticipate will surpass a $1b valuation in the near future.
We’ve coined these high potential companies ‘soon-icorns’.