Unicorn

Key Takeaways

• The term unicorn, in the financial world, is meant for a privately held start-up worth more than $1 billion. 

• The term was first given by Aileen Lee, a venture capitalist

• Examples of unicorns are SpaceEx, Airbnb, Uber, SoFi and Robinhood

What does it mean to be a Unicorn Company?

The term unicorn, in the financial world, is meant for a privately held start-up worth more than $1 billion. The term was coined, in 2013, by the renowned US seed funder for software entrepreneurs and founder of Cowboy Ventures, Aileen Lee. She is said to have used ‘unicorn’ in a Techcrunch article to capture the rarity and delight in finding such successful ventures in the world of business. 

Examples of Unicorns

Examples of the most famous unicorns across the world are SpaceEx, Airbnb, Uber, SoFi and Robinhood. Indian unicorns include Flipkart, Ola Cabs, Swiggy, Zomato, Byju’s, Billdesk.

Valuation of Unicorns

The valuation of a unicorn is usually done based on the perceptions that venture capitalists and other investors have about the unicorn. The more growth they perceive for a unicorn in future, the more it is valued.

Many times, investors may have a hard time valuing a unicorn if it is based on a new innovation and does not have competitors in the market. In recent times, the number of unicorns is increasing dramatically, which leads to a question that can a situation similar to the ‘dotcom bubble’ be on rise and that the market may be over valuing many of the start-ups.

Know More

While start-ups worth more than $1 billion are called Unicorns, those with worth more than $10 billion sometimes called Decacorns.