what are unicorns 
venture capitalist aileen lee popularized the term in the early 2010s i used the word unicorn because it is kind of magical that takes some alchemy some great timing a lot of things have to come together it s not easy she had said 2 the vast majority of companies that are venture funded and have people who are super smart and have great intentions and build great products they don t actually reach that level of valuation it s a pretty hard thing to do these privately held startups are said to defy traditional growth metrics leveraging supposed cutting edge or paradigm shifting advances to achieve rapid market penetration and exponential growth yet despite lee s intentions the term s prominence in the past decade has often highlighted something less magical than fantastical about many billion dollar firms whose values were based more on hype and occasionally outright fraud than fundamentals and traditional risk analysis their rarity during the low interest rates of the late 2010s and even as rates rose in the 2020s has also been less than the name for a mythic creature might suggest cb insights puts the number of such firms worldwide at about 1 200 in 2024 while crunchbase lists over 1 400 the same year 34below we explore what it means for a company to achieve unicorn status providing examples of notable unicorns that have either soared to new heights or fumbled as investors and sometimes regulators got a closer look at their books we ll also review the broader implications of unicorns for investors regulators and the global economy understanding unicornsa unicorn means a privately owned startup valued at over 1 billion 5 to become a unicorn companies must have an idea that appears innovative and marketable have a clear vision for growth and a viable way to pitch all this to venture capitalists and private investors aileen lee founder of palo alto based cowboy ventures a seed stage venture capital fund coined the term 5 reviewing software startups founded in the 2000s she estimated that only 0 07 ever reached a 1 billion valuation according to lee startups that reach this mark are so rare that finding one is as difficult as finding a mythical unicorn 5 she also argued that the first unicorns weren t the formed in a garage tech firms of the 1970s or the even earlier private venture firms of the 1950s but first arrived in the 1990s alphabet inc goog then google she noted was the clear super unicorn of the group earning the moniker with a valuation of more than 100 billion many unicorns arrived in the 2000s though meta platforms meta formerly facebook is the decade s only super unicorn 5 other more popular unicorns based in the u s include home sharing giant airbnb and fintech companies robinhood and sofi technologies inc sofi there are several options that unicorns have for their exit from startup status while unicorns are startups with valuations of over 1 billion companies with valuations of over 10 billion are called decacorns 2unicorn valuationsthe value of unicorns is generally based on how investors and venture capitalists feel they will grow and develop which comes down to longer term forecasting this means their valuations have nothing to do with their financial performance in fact many of these companies rarely generate any profits when they first get running and never do in the end investors and capitalists may come across some hurdles though if there are no other competitors in the industry making the startup a first of its kind there may be no other business model with which to compare making it a somewhat complicated process unicorns and venture investingsince the publication of lee s article the word unicorn has become widely used to refer to startups in the technology mobile technology and information technology sectors usually at the intersection of all three with very high valuations not necessarily supported by their fundamental finances benchmark capital partner bill gurley has been a famous critic of the term arguing that late stage investors are desperately afraid of missing out on acquiring shareholding positions in possible unicorn companies and have essentially abandoned their traditional risk analysis 6whether the technology sector s unicorns are just newer forms of hyper valuations seen in previous eras such as the dot com bubble of the late 1990s the customer funded business author john mullins has argued that the increase in the number of new companies valued above 1 billion is a clear sign of froth in markets 7others argue that the large number of companies with high valuations reflects a new wave of technologically driven productivity like the invention of the printing press nearly 600 years ago is the analogy often used 8 still others suggest that globalization and the monetary policy of central banks created great waves of capital sloshing around the globe on a hunt for unicorns since the great recession which was only catapulted by essentially interest free money in the late 1990s early 2020s the number of new unicorns has steadily declined since 2021 in 2021 there were over 500 new unicorns in 2022 that number dropped to just over 250 and in 2023 there were about 70 9examples of unicornsfar from being merely mythological creatures unicorns are a regular feature in business and finance in fact there are more than 1 200 unicorns around the world perhaps more than 1 400 as of mid 2024 13 collectively they are valued at over 3 888 billion 1some familiar u s based unicorns include uber airbnb spacex palantir technologies inc pltr wework and pinterest inc pins china claims some unicorns as well including didi chuxing xiaomi china internet plus holding meituan dianping and lu com here are other unicorns worth reviewing one hot unicorn startup is nuro an autonomous vehicle delivery company that was founded by two engineers from waymo which is google s self driving car project founded in 2016 nuro became a unicorn startup after receiving a 940 million investment from softbank group which put the company s valuation at 2 7 billion nuro found its own space in the autonomous vehicle industry focusing on zero emissions local delivery vehicles since then nuro has grown and acquired other startups including ike robotics the company is now actively testing and operating fully driverless models in california and texas 10 in march 2022 nuro hit a valuation of 8 6 billion the last data publicly available 11grocery delivery app instacart was another unicorn with over 2 7 billion in funding the company was founded in san francisco in 2012 and delivers from local stores including whole foods safeway jewel osco costco and harris teeter in march 2022 the company slashed its 39 billion valuation by nearly 40 to about 24 billion the move was motivated by market conditions and the need to appeal to a better labor pool 12 the much anticipated ipo finally came on sept 19 2023 shares were valued at 30 each then popped 43 to a high of 42 95 only to close at 33 70 although the company had a target valuation of 9 3 billion in september 2023 its market cap was about 8 75 billion in june 2024 13unicorns in human resourcesthe term isn t just exclusive to the world of startups in fact it is also a common word used to describe a recruitment phenomenon within human resources hr managers may have high expectations to fill a position leading them to look for candidates with higher qualifications required for a specific job in essence they seek unicorns which creates a huge disconnect between their ideal candidate and those in the pool of people available 14for example a medium sized firm might want to recruit someone with marketing experience social media writing sales and management experience they may also seek someone who speaks three different languages while it may be cost effective to hire one person with all those skills rather than multiple employees handling the separate tasks it s often the case that those people aren t available and if they are the budget for the position may not allow for their hire in any case 