Unicorns, Start-up Valued more than a Billion Dollars

WHAT IS A UNICORN?  

The term “unicorn” first appeared in 2013 in an article by venture capitalist Aileen Lee. In her study, she shows that less than 0.1% of companies who received risk capital funds managed to reach valuations above $1 billion. A rarity that inspired her to name these start-ups "unicorns". 

A unicorn is a young company, generally less than 10 years old and not listed on the stock exchange, which has a market value of more than one billion dollars. It is important to underline that this is a value and not a turnover. The latter corresponds to the total sales of a company (excluding taxes). As for the value, it is calculated on the basis of multiple elements, from its accounting data to its future development potential. For instance, a start-up can have only one euro in turnover and be valued at several million dollars, like Facebook. 

Unicorns stand out for their innovative nature, their disruptive offer and their extremely rapid growth. One of the most distinctive traits of unicorns is their growth rate, as they complete their various stages of development in less than 10 years and raise significantly more capital than the average. Thanks to these massive amounts of external capital, unicorns can be leveraged to over a billion dollars and achieve, within a short period of time, their goals such as developing new products and services, positioning themselves internationally and conquering new markets.  

THE SUCCESS STORY OF UNICORNS 

Unicorns are currently enjoying great success. According to CB Insights, there are currently 506 unicorns worldwide, which is 4 times more than in 2015. 

THE REASONS BEHIND THE UNICORN BOOM  

Start-ups are now more valuable than ever before, and they are growing faster due to the significant increase in funds from venture capitalists, mutual funds and hedge funds.  

The key to scaling up quickly for start-ups is to gain more flexibility and at the same time fend off potential competitors. Also, Al Ramadan, founding partner of Play Bigger, says, "we've never seen products and services discovered and adopted so quickly before. Word of mouth today, via Facebook, Twitter, Tumblr, Pinterest, etc., is very fast, and it's the most effective marketing method."  

Investors are now ready to invest large sums of money in an innovative and promising project in order not to miss out on a technological phenomenon, as was the case for some venture capital funds that did not invest when Facebook or Uber were born, for example... Since then, investors have not lost sight of the fact that a unicorn can make them rich and even transform the world economy in just a few years! 

Despite the fact that they have been around for only a few years, unicorns have become fabulous, highly sought-after nuggets. Furthermore, investors are benefiting from a favorable monetary environment. The Covid-19 health crisis has indeed generated a powerful flood of liquidity through quantitative easing (QE).  

This monetary policy consists of a massive repurchase of financial assets by the central bank in order to inject money into the economy and thus allow for the revival of activity and inflation. The French government's stimulus plans and institutional support (such as BPI France, a French business financing and development organization) contributed to the influx of liquidity for fundraising. 

FRANCE, THE NEW UNICORNS PARADISE 

The number of new unicorns has risen sharply. In 2021 alone, 8 unicorns have been created in France, bringing the total number to 23. France is now the 6th country to create unicorns, behind the United States, China, India, the United Kingdom and Israel. 

What are the most influential French unicorns? 

1. Dataiku is a startup specializing in data science. In 2019, Google acquired a stake in its capital, bringing its market capitalization to 4.6 billion dollars. It is the unicorn with the highest valuation in French Tech; 
2. Sorare offers to trade and acquire soccer player cards in the form of NFT. The start-up managed to raise 552 million euros, bringing its market value to 2.9 billion euros; 
3. Contentsquare is specialized in the analysis and exploitation of data concerning consumer behavior. The start-up has raised around 408 million euros, one of the largest fund-raising deals in French Tech. Its value has reached 2.8 billion euros. 

Aircall, Younited Credit, Alan, Doctolib, Blablacar, OVH Cloud, Back Market, Voodoo, ManoMano, Vestiaire collective... French unicorns are now known to the general public and their success should help achieve the goal set by Emmanuel Macron to reach 25 unicorns by 2025. 

Do you want to start your own exciting entrepreneurial adventure? The Groupe IGS can help you by offering a Learning Lab and an incubator, The Why Not Factory. You can also follow a program adapted to your entrepreneurial objectives, giving you all the keys to make your project a reality!