A Brief Look at the New Unicorns

Unicorns – those colorful ponies that can fly – can also have another meaning. In the private equity and venture capital world, unicorns refer to the value of a company. When the value of a typically later-stage startup surpasses $1 billion in valuation, the company is called a unicorn. How is the unicorn world doing? Here’s a look.

Overall Unicorn Creation Around the World

The first look is the number of unicorns created around the world from 2016 through August 2022. Perhaps coming as no surprise, the number of new unicorns created in the past 2 ½ years is quite amazing. From 2016 through 2020, unicorn creation was typically between 5 and 10.

The pandemic changed the world, including the creation of unicorns. Based upon data provided by private equity data provider Pitchbook, new unicorn creations have exploded, averaging around 30 per month over the past 2 ½ years. Simply amazing. [Apparently printing a ton of money shows up in places where investors put their money?]

The North American View of Unicorns

Shifting to the North American view of unicorns, the overall picture is very similar to the global view. From 2016 through 2020, unicorn creation every month fluctuated around 5 every month. Since the latter half of 2020, unicorn creation has been much higher, fluctuating around 25 new unicorns each month. Interestingly, the most recent unicorn creation figures show significant slowing, with only 8 and 9 unicorns created in July and August, respectively.

The European View of Unicorn Creation

Shifting to the European view of unicorn creation, the picture is a little sparser. There were several months from 2016 through 2020 when no new unicorns were created. Interestingly, since the middle of 2020, there have been at least 1 new unicorn created every month. The recent slowdown in unicorn created has also been much less pronounced than in North America. The number of unicorns created in May and June 2022 (the most recent months for which data are available) stood at 6, not too much fewer than what was seen in prior months.

Summing Up

Overall, the unicorn world is growing, with the number of unicorns created in the past few years far surpassing what we had seen up to 2020. Time will tell if the rate of unicorn creation will change in the coming years, but for now, life is good as a successful entrepreneur.