IT sector breeding most unicorns
The IT sector has by far the largest number of so-called unicorns – billion dollar startups. Once rare, billion-dollar startups have become commonplace. Globally, there were 1,404 active unicorns as of July 1, 2024. More than 580 new unicorn companies were formed in 2021 alone, according to a report from US-based financial data firm PitchBook. The term unicorn usually describes startups that are valued at more than $1 billion.
Sectors that have most unicorns:
- IT 874
- Consumer products and services 320
- Healthcare 219
- Business products and services 218
- Financial services 123
- Energy 37
The US has the most active unicorns of any country with 714 companies, or 50.8% of the global total as of July 1, 2024.
Chinese unicorns are the second-most common at 316 companies, followed by India (62 unicorns), UK (47 unicorns), then Israel and Germany (26 unicorns).
“Unicorns are not exactly common, but they’re far from rare. In 2021, nearly 8% of all companies that received VC funding globally were valued at $1 billion or more”, according to PitchBook.
“The fact that so many funding rounds now involve billion-dollar companies is due in part to the growth in VC fund sizes. Several late-stage investors, most notably SoftBank (Japanese multinational investment holding company), have tech investment strategies built almost exclusively around backing companies that are valued at more than $1 billion. Due to increasing competition, however, some of these investors are moving into earlier stage deals with the hopes of building relationships with tomorrow’s unicorns”, the report says.
The top unicorns in the world—in terms of valuation—include ByteDance, Ant Group , Stripe and SpaceX, according to PitchBook data.
“Because the elite group of unicorns has become so large, some have argued that new terms are needed to describe them. The term decacorn is often used to describe startups with a valuation above $10 billion.”
Venture capitalist Aileen Lee, the founder of Cowboy Ventures, coined the term “unicorn” in 2013 to describe billion-dollar US software companies.
At the time, these startups were both rare and special: Lee counted just 39 companies that met her criteria in 2013, a list that included Facebook, LinkedIn, Workday and Twitter, PitchBook data shows.
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