Managed.IT - issue 55

18 MANAGED.IT 01732 759725 MANAGEMENT Where are the most unicorn companies? When it comes to unicorn startups, Americans have a knack for getting it right. The sheer volume of companies in the USA and China no doubt plays a part statistically, as there are almost 30 million small businesses operating in America 1 . Small businesses make up 99.9% of companies in the USA, meaning that the 703 American unicorn startups (significantly more than any other country) account for just 0.01% of USA businesses. China also produces an impressive number of unicorns. However, with 206, it has less than one third as many as the US. Specific areas within each country can also make a difference. For example, Silicon Valley, a hub for technology and innovation, has founded 31 unicorn startups over the years, including giants such as Uber and Airbnb. With most successful unicorn startups focusing on software development, areas like Silicon Valley that dominate the tech industry are ideal locations. How does the UK stack up? Although the UK produces far fewer unicorns than the likes of China and the USA, we’re doing very well in the grand scheme of things, sitting in third place globally. A report from London Tech Week 2019 2 by Tech Nation and dealroom.co reveals that in the past 12 months 13 UK companies have reached unicorn status; that’s more than one a month! if you’re more of a lone wolf, as companies with a single founder are the second most common. However, when it comes to unicorn startups, it seems that too many cooks do spoil the broth. 3 They mainly produce software — The most successful unicorns are those that provide their customers with quick and convenient services. That’s why 87% of successful unicorns create software products: easy-to-use, close at hand programmes that make our lives easier. 4 They cover a wide range of industries — While software is the dominant product type, unicorn startups cover a wide range of industries. Retail and technology account for the lion’s share, but unicorns are also well represented in the finance and media sectors. A unicorn startup, or unicorn company, is a privately owned business valued at over $1 billion. Although still very much a rarity, the number of unicorn startups is higher than ever. The exact total is always in flux, but recent research by CB Insights found that there are over 390 unicorn startups globally. So how do they do it? To find out how clever ideas become global sensations, Positive Commercial Finance has taken an in-depth look into some of the biggest unicorn companies in the UK and across the globe. Our analysis shows that regardless of industry, location or manpower, companies that achieve unicorn status have a number of factors in common. 1 A five-year build-up — On average, it takes a successful unicorn startup five years to hit the coveted $1 billion mark. This isn’t always the case, though; some companies can soar to unicorn status in as little as two years, while others can take more than a decade of hard work to get there. 2 They’re built on partnerships — If you’re looking to create a unicorn startup, your best bet is to find a business partner. Of the top 100 most successful unicorn companies, 35% began with two founders. It’s not all bad news What it takes to become a unicorn They’re rare, they’re magical and they have to be seen to be believed. But unicorns aren’t just mythical beasts: they’re what every business owner aspires to. Here, John Waddicker, Director of Positive Commercial Finance, explains what it takes to become a unicorn 0 Year 1 Unicorn Growth ($ billion) Year 2 Year 3 Year 4 Year 5 1 0.25 0.75 0.5 5+ Founders 4 Founders 2 Founders 3 Founders 1 Founder Number of founders 0 10 20 30 27 35 21 7 10 Hardware 6.0% Software 87.0% Other 7.0% Unicorn product type Food Delivery 6.6% Finance 14.5% Transportation 7.9% Media 7.9% Technology 25.0% Retail 32.9% Social Networks 5.2% Industry Netherlands Israel Sweden/ France USA China UK Germany India Total number of unicorns by country 0 200 600 400 800 703 206 72 29 26 19 14 12