What is a Unicorn Startup?
In case you missed our article covering the Startup Studio Terms You Should Know, we covered a trending term in the world of startups: a unicorn startup. In the world of startups, a unicorn describes a startup company with a value of over $1 billion. A few popular unicorns you are probably familiar with include industry disruptors like Airbnb, Uber, SpaceX, Robinhood and SoFi. Thousands of businesses are built every year, and only a fraction of them will make it beyond the 5-year mark. Even fewer will generate millions, much less billions of dollars in revenue. Why? Because not every solution is worth a billion dollars. So how can you strike gold and increase your chances of building a unicorn startup?
The current climate of startups
The evolving global pandemic has shaped the demand for novel technologies and services. Stay at home guidelines have influenced consumer behavior, calling for solutions to new pain points in the way that we live our lives. People now spend more time in their homes versus pre-COVID public settings, such as offices, shopping centers and restaurants. Clearly, consumer purchasing habits have changed to match these behaviors. For example, eCommerce has surpassed levels not expected until 2025, bringing in over $843 billion in 2021. This is merely one symptom of the consumer behavior trends resulting from the pandemic. Everything from how we dress, how we shop and how we socialize to how we manage our health has accommodated a new way of life, and companies have been forced to respond nimbly the past two years.
Enterprising founders have paid attention to these trends. These types of widespread behavioral shifts should spark new ideas and provide opportunities for businesses to evolve and disrupt their industries.
In response, multiple industries have produced innovative companies that quickly gained traction, resulting in unicorn startups. This occurred, famously, in industries like biotechnology, healthcare, and home fitness. Preexisting unicorn companies possessed the perfect recipe to thrive in a post-COVID-19 world, further expediting their success.
Instacart: With many elderly and immunocompromised consumers afraid to spend time in public during the pandemic, Instacart has provided the means to have groceries delivered to homes and with minimal outside contact. Instacart saw an additional 8.32 million orders in the first 3 months of the pandemic. U.S. grocery ecommerce sales in general have increased 17.8% between 2020 and 2021, with growth continuing even as the pandemic has begun to level out. Market penetration grew remarkably; the number of consumers who made at least one online grocery order grew 42.6% in 2020 alone.
Calm: Throughout the course of the pandemic, many people have experienced new or heightened anxiety and depression. Calm, like many remote mental health platforms, has offered convenient mental health solutions that could be accessed from the safety of the home.
Examples of unicorn startups by industry:
e-Commerce: Rent the Runway
Clothing rental for any event or occasion
We spend an exorbitant amount of money on special event attire that we will likely never wear again. Rent the Runway offers an easy and affordable alternative to sourcing outfits for a special event or occasion so that you can look your best without breaking the bank
Transportation: Uber
Offers transportation on demand
With few restrictions, anyone with a clean record, driver’s license, and safe car can provide transportation to those in need to and from any location, making it easy to find a ride under any circumstances
Retail: Instacart
Remote grocery shopping and delivery
What it solves: Users save time conveniently and safely shopping for groceries from home
Data and analytics: AppsFlyer
Marketing attribution data and analytics
Provides brands with a holistic view of every user journey across platforms, channels, and devices
Health: Virta Health
Diabetes care delivered virtually
What it solves: Provides custom diabetes care, virtual health record-keeping, patient diet coaching and education
Fintech: Robinhood
Commission-free stock trading and investments
Makes complex investing easy for the average consumer with minimal knowledge required. Allows users to manage their own investment portfolios from the convenience of their cell phone
Travel: VacationRenter
Travel booking/ vacation rentals
Compiles rental listings worldwide in one convenient place with easy access to ratings, reviews, and accommodation information. In addition to conventional rental properties and hotels, the site also provides listings for alternative accommodations like RVs for every kind of traveler. Not only do you see all available listings to book your best stay, but the site also provides recommendations for local attractions and highlights nearby
EdTech: Duolingo
Free language learning on your own time
Learning a language has never been easier and is accessible to anyone with the app and a few minutes per week
Software: Grammarly
Automated spelling and grammar audits
Never send a poorly written email or submit a paper with embarrassing grammar errors again. Within seconds, Grammarly conducts a full writing audit to identify errors and suggest improvements
The Startup Unicorn Recipe
Want to figure out how you can reach unicorn status? Let’s take a look at what all of these unicorn startups have in common…
New needs and consumer behaviors make space for new, emergent startups, and startup founders must be observant and poised to seize these opportunities. We are excited to see what new startup unicorns will emerge from a post-pandemic world. In case you missed it, don’t forget to check out our latest blog post on…
