The surge in venture activity during 2021 and 2022 propelled the valuations of technology companies to unprecedented heights, resulting in a surge in the count of privately held billion-dollar companies, aka unicorns. The global number of unicorn companies reached 1,221 in July 2023, according to Cb Insights. Interestingly, the collective value of these world’s unicorns stands at $3.82 trillion, roughly equivalent to the combined market capitalization of Amazon, Meta (formerly Facebook), and Google.
While the count of unicorns may appear substantial, it could have been even greater had startups not faced funding winter. A decline in venture deals and investments during the latter part of 2022 and the first half of 2023 caused the collapse of many startups. In Q2 2023, global venture funding declined 13.2% compared to the previous quarter, reaching its lowest point since Q2 2020. The drop in venture investment appears even more alarming, i.e. 49% compared to the year-ago period. This drop brought global venture dollars down to $60.5 billion in Q2’23, from the robust $69.7 billion in Q1’23 and $118.7 billion in Q2’22.
The intense fear of missing out (FOMO) among venture capitalists, which was once so prevalent, has now faded into history, leaving a significant mark on the rate at which new unicorns are coming into existence. The second quarter of 2023 saw the birth of a mere 18 new unicorns, marking a striking 80% drop compared to the previous year. However, it’s interesting to note that the global count of new unicorns surged 20% QoQ during Q2, bouncing back from a six-year low that was recorded in Q1’23.
Most Valued Unicorns Worldwide
Here are the most valued unicorns in each industry:
- Enterprise tech: Canva ($40B)
- Consumer & retail: SHEIN ($66B)
- Financial services: Stripe ($50B)
- Industrials: SpaceX ($137B)
- Healthcare & Life Sciences: Devoted Health ($12.6B)
- Media & Entertainment: ByteDance ($225B)
- Insurance: Howden Group Holdings and Coalition (tied at $5B)
The industry with the most extensive presence among unicorns is Enterprise Tech, encompassing 30% of all unicorns. This industry includes tech companies that serve general B2B needs or cater to various industries.
Delving into specific segments of the Enterprise Tech industry, such as Information Security and Data Management, we find they each contribute 5% to the overall unicorn count.
Following closely are the Consumer & Retail and Financial Services sectors, each boasting an impressive 216 unicorns or 18% share of the global unicorn community.
Among the companies that achieved unicorn status in 2023, some of the most valued ones include Anthropic valued at $4.4 billion in the Enterprise Tech sector, eToro valued at $3.5 billion in the Financial Services sector, CoreWeave valued at $2.22 billion in the Enterprise Tech sector, and ChaBaiDao valued at $2.52 billion in the Consumer & Retail sector.
Global Unicorns by Country
On a global scale, the unicorn club comprises 51 countries and regions. Dominating this scene is the United States, which accounts for more than half of all unicorns. Within the United States, two industries surpass the global average: enterprise tech, accounting for 39% of US unicorns, and healthcare & life sciences, contributing to 14% of the nation’s unicorn count.
China follows closely behind, accounting for 14% of all global unicorns. Notably, China’s unicorns predominantly cluster within the Industrial and Consumer & Retail domains, commanding 33% and 29% share of all unicorns, respectively. It’s worth mentioning that China is witnessing a decrease in new unicorn births compared to its historical track record. As of July 25, 2023, it contributed a mere 6% (4 out of 71) of the unicorns born within the last year.
India stands third in the list of active unicorn companies worldwide. The country has 70 unicorns as of July 2023, representing 5.7% of the total unicorns across the world.
The year 2021 witnessed an exhilarating surge, with 33 Indian companies attaining the coveted unicorn status. Notable names in this lineup included Mamaearth, CureFit, MobiKwik, CoinDCX, UpGrad, and BharatPe, creating a buzz in the startup world. However, this figure declined to just 18 in 2022, with names like boAT, LivSpace, and Xpressbees making their mark. Unexpectedly, according to data from CB Insights, no Indian companies managed to hit the magical $1-billion valuation mark in 2023 so far.
In a challenging landscape, both Indian and global startups are grappling with a dual burden of funding constraints and an unexpected economic downturn. These factors have compelled many to undertake significant measures, including massive layoffs, a strategic overhaul of their existing operations, and a temporary freeze on hiring initiatives.
It will be interesting to see how tech companies will overcome these hurdles and possibly see more of them reach valuations of over $1 billion or even $10 billion by the end of 2023. This makes us wonder: What twists and turns will the unicorn narrative take next? How will these formidable companies continue to adapt and reshape the business frontier?
