Unicorn Company: Billion Dollar Startups

We all are aware of the mystical creature "Unicorn" but here we’ll talk about what is a Unicorn in business. It is not easy to launch a startup with an innovative idea to disrupt the markets, further, it is even tougher to run a successful business out of a startup idea. When we talk about a unicorn company we mean a startup company that has raised above all mediocre startups that have a monotonous growth.

You must have heard people referring to Uber, Didi, Pinterest, Snapchat and the like as Unicorn Company, but do you know what exactly is a Unicorn company and why the name Unicorn? Who coined the name Unicorn and When? Is there anything above a Unicorn? Well, in this blog you’ll get all your answers and much more information about a startup unicorn.

What is Unicorn Company?

In this fast-growing world, there are three types of startups: those that do not turn out well, those that get successful outcomes and the very rare ones that achieve outstanding success. A unicorn company comes under the category of those very rare ones.

You must ask how rare? Well, according to a report, out of every 10,000 startups, only one becomes a unicorn. A unicorn company is a privately held startup that has a valuation of $1bn or more. Unicorn startups are not as rare now but the benchmark has been set and all the entrepreneurs starting up with their new ventures want to jump off the hurdle of $1bn before going public.

This is sometimes contrasted with "cockroach" startups (Yes, there is something like a cockroach startup too). Its characteristics are steady growth and strict cost control.

After defining a unicorn company, let’s see how this word came into existence.

Who Coined the Word "Unicorn Company" in Business?

On the sixth anniversary of Aileen Lee’s (a venture capitalist) article, "Welcome To The Unicorn Club", let’s talk about unicorn startups. What is a unicorn startup? A startup company founded after 2003 that has a valuation of more than $1 billion and is privately held can be called a unicorn startup.

Lee, the founder of Cowboy Ventures, listed 39 companies in this category. In those days, unicorn companies were rare whereas now the number is increasing at a rapid pace.

What Is a Tech Unicorn Startup?

Due to the emerging advancements in technology day by day, the tech companies are being valued higher than ever before. The tech unicorn startup gets investors easily if they have a problem-solving idea, for instance, all the hype for Uber for X and other startups that resemble the Uber business model.

Now let’s look at the tech unicorn definition. As a unicorn company is a startup that has a valuation of more than $1bn with the help of investors without going public, in a similar fashion a tech unicorn is the same; a tech startup that has raised a valuation of more than $1bn. Many unicorn companies come under this category, Pinterest for example.

There is an ongoing trend of tech startups not going public. However, to go on this path, it is necessary that the business model of the tech startup be robust and scalable. There are over 150 tech unicorns under progress today. Any unicorn company is not focused on achieving substantial profit in the early years, it rather focuses on market share and scale.

The reason behind the high rise valuations of tech startups to an enormous amount is due to unique technological innovations. It has become easier than before with profitable technologies like mobile advertising, cloud computing, and P2P platforms. The list of inspirations is huge from online galleries like Pinterest to genius creations like WhatsApp.