While unicorns used to be a rare, they are not anymore. In 2013, Aileen Lee of Cowboy Ventures first used the term “unicorn”, referring to start-ups worth $1 billion or more. She identified 39 unicorns. The vast majority were valued below $5 billion. Apart from Facebook, the average was around $3.5 billion. 27 of these unicorns were based in the San Francisco Bay Area.
Only 8 years later in 2021, we experienced an explosion in the number of unicorns. According to CrunchBase, the highest number of new unicorns was in March with 58 and the lowest in February with 26.
By comparison, the best-performing month for unicorns in 2020 only reached 24 companies, most months were much lower.
As of the end of July, there were 942 unicorns in Crunchbase’s Private Company Unicorn Board. At their current rate of growth, unicorns will exceed the 1,000 mark sometime this month. They’re collectively worth more than $3 trillion.
The reason for the growing number of unicorns: More capital is chasing a finite number of start-ups to the point where the amount of capital is overwhelming the growing number of excelling start-ups. Nowadays, everybody seems to want a piece of the start-up investing space and this is driving up prices.
Sven Franssen