In the ever-evolving landscape of entrepreneurship, a rare breed of companies has captured the world’s attention — unicorn startups. These mythical creatures of the business world are not bound by the limitations of traditional enterprises. With valuations soaring to the billion-dollar mark and beyond, unicorn startups have rewritten the rules of success, making headlines and disrupting industries at an unprecedented pace. Companies like Uber, Snapchat, and Airbnb are often called ‘unicorns’, but what does that mean?
To put it simply, in the venture capital industry, a ‘unicorn’ company is any startup that has reached a valuation of $1 billion. When the term was first used, there were only about 39 startups that could be called unicorns, and even though the number of unicorns has gone up significantly since then, the meaning and definition of a unicorn startup remains the same. The first question that comes to mind after this explanation is, can only startups become unicorns? The answer is yes, this term is only given to startups that cross the valuation threshold. The startups that exceed the valuation of $10 billion are grouped under the term called decacorn (a super unicorn). Dropbox, SpaceX and WeWork are some of the examples of decacorn.
So, how can you identify a unicorn startup? Here are some key features that all unicorns have in common:
Unicorns experience exponential growth in a relatively short period. They expand their customer base, revenue, and market presence at an astonishing rate, often disrupting established industries.
Many unicorn startups are technology-driven and leverage innovative solutions, such as advanced software, artificial intelligence, biotechnology, or cutting-edge hardware, to address contemporary challenges.
These companies are known for disrupting traditional industries by offering innovative products or services that challenge existing norms and business models. They often introduce efficiencies and convenience to consumers. For example, Uber changed the taxi service industry, and Airbnb changed the hotel industry.
Unicorn startups can have a significant impact on the economy by creating jobs, fostering innovation, and reshaping industries.
Currently, the biggest unicorn in India is the online educator BYJU’S, which is worth $22 billion. Swiggy and Dream11 follow behind as they are worth $8 billion each.
It’s important to note that not all unicorn startups are successful in the long run, and the valuation alone does not guarantee profitability or sustainability. Many factors, including market dynamics, competition, leadership, and business models, play a role in determining the ultimate success or failure of a unicorn startup.