Squads

What are unicorn startups

What are Unicorn Startups and Decacorns?

Ever heard of SHEIN or SpaceX? Or have you heard of payment systems Mollie and Klarna? Well, these are examples of (super) unicorn startups. Not every startup is able to grow its business sky-high. Before we dive deeper into how to grow or scale your company, let’s talk about what a unicorn startup actually is.

What are unicorn startups?

Have you ever wondered what the difference is between a startup and a unicorn startup? There’s a really simple definition. Let’s split up the two terms. Not every company can be named a startup. According to Forbes, startups are: ‘Young companies founded to develop a unique product or service, bring it to market and make it irresistible and irreplaceable for customers.‘ When we talk about unicorn startups, the venture capital industry refers to any startup that reaches a valuation of $1 billion. The actual term ‘unicorn startups’ was coined by Aileen Lee, founder of Cowboy Ventures. He found that there was a need to describe startups that had a valuation of over $1 billion because it was still a rarity. Since then a lot has changed and a new term was introduced, describing startups with a valuation over $10 billion: decacorn (or super unicorn). SpaceX and Dropbox are examples of decacorns. Did you know that the term unicorn is different for Canadian startups? If a Canadian startup has a valuation over $1 billion it’s called a ‘narwhal’. The Image below presents the number of unicorn startups per country (April 2021) unicorn startups per country

What startup companies do well?

Not all startups make it past the first few years. However, according to a recent report, the software industry is where all the magic happens. In 2015 there were ‘only’ 82 unicorn startups. 5 years later this had grown to 495. An overwhelming percentage of 87% have unicorn products in the software industry, 7% is in hardware and the rest (6%) includes other products and services. It seems like software is the market to be in at the moment. In this technological era, it’s obvious that most of us can’t live without software. Think about how many software systems you use every day. From online banking, your smartphones to stay in contact with colleagues, to an online calendar. At Squads, we know the real value of software because we’ve guided many startups and scaleups to software success. If you’re looking for a community of top-notch software developers, you’ve come to the right place. Contact us if you have any questions.