The Global Landscape of Unicorn Startups: Examining Trends and Opportunities

The word “unicorn” is commonly used for a company with a valuation exceeding $1 billion. Today about 1,400 unicorn companies globally stay private. Among them are well-known unicorns such as Canva, Grammarly, and the Chinese e-commerce platform Shein which has recently raised a staggering $2B.

With the rise of venture capital firms and angel investors, startups have had greater access to capital and grow faster than ever. The best startups join the unicorn club, and today we will discuss the most recent trends and opportunities for unicorn companies, as well as for Angel investors who backed them.

The Role of Angels in the Growth of Unicorns

Angel investors are individuals who provide financing and their expertise to early-stage companies or startups. Angel investors sometimes act as mentors for founders, providing invaluable business advice, guidance, and networking opportunities.

With the rapid growth in technology, startups launch and scale easier and cheaper. The startup founders have lower barriers to entry. Most unicorn companies are directly related to technology and innovation, for example, SpaceX, Faire, and Pony.ai. While almost everyone knows Elon Mask’s SpaceX, we could share something about Faire and Pony.

Faire is an online wholesale marketplace for small businesses and independent retailers founded in 2017. It connects over 150,000 retailers with thousands of makers and brands offering unique products and designs. Faire has received significant investments from venture capital firms and is one of the fastest-growing companies in the e-commerce industry. Before Faire became a unicorn company, it raised over $170 million.

Pony.ai is a startup company focused on developing autonomous driving technology. The company was founded in 2016 by James Peng and Tiancheng Lou. Pony.ai is one of the market leaders and could play a significant role in shaping the future of mobility.

According to Tipalti, 308 companies joined the Unicorn list in 2022, accounting for 21.52% of the total unicorns. Among the new companies is Miro, a visual collaboration platform valued at я at the most recent VC round and used by companies such as Walmart, Cisco, and Volvo. In addition, the list also includes fintech company SumUp, valued at $8 billion, and supply planning and retail platform Relex Solutions, valued at $6 billion.

2018 was a record year for the unicorns. Unicorn numbers exploded due to several reasons. First, more investors became confident in tech startups. Second is the rise of disruptive industries such as fintech, healthcare, and transportation. Famous unicorns that have emerged in 2018 include Uber, Airbnb, and SpaceX. Just to give you an idea of ​​global trends.

Trends in Unicorn Startups

Up until 2002, only a few companies were valued in the billions of dollars annually. Growth began to accelerate in the mid-2000s and exploded in 2010. Look at the chart above to see how many unicorns have appeared over the years. The picture refers to how many companies were founded each year. These companies later became unicorns and joined the unicorn club.

Over the years, the number of unicorns has been steadily increasing. According to CB Insights, there were 146 new unicorns at the end of 2014, and that has grown to over 300 new unicorns as of 2022. Though in 2021, the number of new unicorns was much higher — a record 529 unicorns.

Fintech and AI startups dominate the unicorn space, with companies like Stripe, Revolut, and Robinhood leading the way. These companies leverage new technologies to streamline financial operations and improve customer experience. They have gained momentum in 2023.

Now there are current trends such as artificial intelligence, blockchain technologies, and space innovations. Not so long ago, OpenAI became one of the most discussed companies thanks to the development of their ChatGPT product.

Since OpenAI is a private company, there is no official information about its market value. In September 2021, the company closed a new $2 billion funding round, demonstrating the high market valuation of its products and technologies. But the trend toward AI development is visible in 2023.

Opportunities for Entrepreneurs and Angel investors

The growth of unicorn startups brings opportunities for entrepreneurs to create cool products that can disrupt traditional industries. However, launching a successful startup requires more than a good idea. It takes hard work, dedication, and the ability to adapt and pivot — only such an approach can bring profit and survive the crisis.

The unicorn angel community is relatively small, and networking is vital. By attending events and joining networks such as angel investor groups, angels connect with the founders and find peers to co-invest in future unicorns. Sometimes angel investors partner with venture capitalists. By piggybacking on the expertise and resources of a venture capital firm, angel investors can gain access to deals that they may not have been able to find on their own.

Angel investors in startups can earn significant returns on their investments, but the profitability of their holdings in unicorns can vary widely. According to a study by Cambridge Associates, unicorn angels received a median investment return of 22.7%, with a range of -9.7% to 93.7% in 2018. LINK

By carefully evaluating investment opportunities and diversifying their portfolios, angel investors can increase their chances of profitability and participate in the growth of the world’s most innovative companies.