The Surprising Evolution of Unicorns

Seven unicorn years is an eternity

Image from Fortune, Illustration by Jeremy Enecio

(Spanish version here. Versión en español aquí)

Seven years ago I wrote a post titled “Billion Dollar Tech Club”. In 2011 we didn’t yet talk about Unicorns (Aileen Lee introduced it in 2013). In this post I talked about the fact that in history, only 29 venture-backed privately held tech companies had reached the billion dollar valuation.

This table shows what has happened in 7 years with some of the companies mentioned in my 2011 post:

Of the 12 companies, 9 have grown in value and 6 are iconic companies today: Facebook, Alibaba, LinkedIn, Twitter, Airbnb, Square. The combined value of the 13 companies has multiplied by 7.5 in 7 years.

Humans have not evolved much in 7 years, but today’s unicorns have little in common with those in 2011.

The population has increased

At the end of 2011 there were about 14 unicorns. In 2018 there are 284.
(in this post, the unicorn category is applied to privately held companies. Once they go public or are bought by a public company, they are no longer considered unicorns).

Their birth rate has increased

In 2011, 4 companies attained unicorn status (Gilt Groupe, Living Social, Better Place, Zynga) versus 70 so far in 2018.

They are younger

In 2011, the average age of a unicorn was 3.4 years old and the median 2.5. In 2018, the average age is 1.8 years old and the median 1.

Their habitat has expanded

In 2011, unicorns roamed the United States almost exclusively, with the exception of Alibaba. In 2018, more than half of unicorns were born outside the United States.

United States→ 134 (47% of total unicorns in 2018)
China → 83 (29%)
United Kingdom → 14 (5%)
India → 14 (5%)
Germany → 7 (2%)
South Africa → 5 (2%)
Other 20 countries → 27 (10%)

Of the 79 that attained unicorn status in 2018, we see an even stronger internationalization trend, particularly in China:

United States → 33 (42% of newly minted unicorns in 2018)
China → 26 (33%)
India → 5 (6%)
United Kingdom → 3 (4%)
Israel → 3 (4%)
Germany → 3 (4%)
Other 7 countries → 6 (7%)

Silicon Valley losing ground

Silicon Valley continues to be fertile ground for unicorns, but it’s far from having the quasi-exclusivity it had over the species in 2011.

Mutations have given life to new species: decacorns (> $10bn) and hectocorns (> $100bn)

In the first table of this post we see that in 2011 there were already 2 decacorns: Facebook ($52bn) and Groupon ($25bn). In 2018 there are 18 decacorns.

In 2018 we see a new species, the hectacorn: Ant Financial, born in China in 2016 and with a $150bn valuation in 2018.

As a reminder, many of the 2011 unicorns went public and now are worth more than $10bn (Dropbox, Twitter, LinkedIn, Square, Facebook) but they are not considered decacorns or hectocorns because they are publicly traded animals.

China: new breeding ground for unicorns

The expansion of unicorns, decacorns and hectocorns in China is impressive, both in quantity and in value.

The following illustrations show the number and the value of privately held billion dollar companies in 2012 and 2018 in the US, China and rest of the world. We clearly see a growth in the number of unicorns and the surge in decacorns in this period of time, as well as a marked increase in activity and valuations in China and the rest of the world.

Privately held companies valued at $1bn or more — 2012

2012. Fuente WSJ

Privately held companies valued at $1bn or more — 2018

2018. Source WSJ

If we follow the money, we see that China is marching firmly on its way to becoming the largest unicorn country in the world. For the first time in history, in 2018 Chinese startups have received more VC money ($71 bn) than US startups ($70bn).

Fuente WSJ con datos de VentureSource

Few females, but more than before

There are more female-founded unicorns in 2018 than total unicorns in 2011. But women are still under represented in the unicorn population. Of the 239 unicorns in May 2018, only 23 (less than 10%) were founded by women entrepreneurs. In the United States, 12% of unicorns were founded by women and in the rest of the world barely 7% were. As I wrote in The Third Wave of the Internet , one of the consequences of the Rise of The Rest phenomenon is that the increased diversity of entrepreneurial activity will improve the representation of females (and other under-represented segments of the population) as founders of the next unicorns, decacorns and hectocorns.

Source: Pitchbook

Seeing how much things have changed in the land of unicorns in the last seven years, it will be interesting to witness how this species continues to evolve. Any takes on what we will be saying about them in 2025?


Forbes: The Billion Dollar Startup Club Then and Now
cbinsights: The Global Unicorn Club
WSJ: In China, a Dot-com Deja-Vu
Pitchbook: Billion Dollar Companies with Female Founders
zigzag: Billion Dollar Tech Club

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s