Companies with a capitalization of more than $1 billion are called unicorns.

The name of a mythical creature is called very real private companies and startups worth more than $1 billion. It is these companies that radically changed entire industries, made a real revolution and became a household name in modern world technologies.

TOP 10 unicorn companies in the world

1. Uber ($68 billion) - USA.

A few years ago, when the Americans increased their fare, Garrett Camp and Travis Kalanick decided to help fellow citizens reduce them by creating a service for finding, calling and paying for Uber taxis. Their innovative service has expanded significantly since then and now also includes car rental services, helicopter transportation and self-driving cars.

2. Didi Chuxing ($50 billion) - China.

Uber's Chinese competitor was able to outperform the latter in the US and reach 20 million rides per day in China. Offering not only a taxi service, but also car rental, luxury transportation and car rental, Didi Chuxing has become one of the most successful private companies of the 21st century.

3. Xiaomi ($46 billion) - China.

Xiaomi is a software and electronics manufacturer founded in 2010. In less than seven years, the company has become a leader in the smartphone market and has developed some of the most popular mobile applications, laptops and home appliances in the world. With 8,000 employees, Xiaomi truly is one of the most impressive unicorns in the world.

4. AirBnB ($29.3 billion) - USA.

AirBnB was founded in 2007 by Brian Chesky and Joe Gebbia and began as an attempt to rent out a small loft space for rent. The beginning quickly grew into a large and successful venture as the existing players in the hotel market could not keep up with consumer demand. With revenue growing by 80% between 2015 and 2016, AirBnB has expanded to 65,000 cities worldwide.

5. SpaceX ($21.2 billion) - USA.

As the world's largest aerospace and space transportation company, SpaceX has grown tremendously since it was founded in 2002 by entrepreneur Elon Musk. SpaceX was the first private company to launch a spacecraft into orbit and is now working with the International Space Station to deliver cargo. In addition, the company announced the first human flights to Mars and tourist flights to the moon.

6. Palantir Technologies ($20 billion) - USA.

Palantir is engaged in data analysis for financial institutions, as well as to combat terrorism and cyber fraud. The company was founded in 2004 and has revolutionized data analytics for government, healthcare and financial institutions. Despite being valued at over $20 billion, the company does not plan to go public in the near future.

7. WeWork ($20 billion) - USA.

WeWork was founded in 2010 with the goal of providing shared workspaces in 16 different countries. Now valued at over $20 billion, the company provides physical and virtual workspaces, employee benefits, and social events for workers around the world.

8. Lu.com ($18.5 billion) - China.

This online finance marketplace was founded in 2011 as a P2P lending platform. Since then, Lu.com has become the second-largest online lender in China, with around $2.5 billion in loans.

9. China Internet Plus Holding ($18 billion) - China.

China Internet Plus Holding was formed by the merger of two successful competitors Meituan and Dianping in 2015. The company is valued at more than $18 billion and is one of the world leaders in restaurant reservations, event tickets and other services.

10. Pinterest ($12.3 billion) - USA.

Pinterest was founded in 2009 and is now valued at just over $12.3 billion. This media platform is used by collectors, businesses and marketers around the world. Pinterest serves as a "catalog of ideas" for users on a variety of topics.

A few years ago, a billion-dollar startup was extremely rare. However, companies are now raising funds from venture capital funds at more mature stages, thanks to which the number of unicorn startups is growing every day. Moreover, some of them bear the proud title of "super unicorn". This means that they managed to achieve a capitalization of more than 10 billion dollars. It takes an average startup about 7 years to achieve unicorn status. More successful in this field are those companies that have educated and experienced people on the staff, while the team has its own history and a long period of work together. And while scientists are wondering “is this not a bubble?” Entrepreneurs are wondering: “What is the secret of such a rapid growth of startups?”

Xiaomi

The Chinese company, led by "Asian Steve Jobs" Lei Jun, was established in 2010. The “unicorn” spent the attracted investments on the development of its own smartphone, while until 2012 the startup worked without profit. Today, Xiaomi is a successful company, with an army of fans around the world, and a value of $46 billion.

Uber

In 2009, Garrett Camp and Travis Kalanikov created Uber, which later became one of those who change the world around them. The startup, thanks to its practicality and timeliness, quickly grew into a successful $41 billion business. Taxi drivers around the world are on strike against a modern and democratic project, while Uber itself introduces helicopters and boats to the park to cross the Bosphorus.

Airbnb

Brian Chesky, Joe Gebbia, Nathan Blecharczyk - these three people in 2008 excited hotel business by suggesting Airbnb. The service for finding apartments and accommodation from individuals with a transparent system of reviews and reasonable prices has quickly become the main service for finding accommodation for travelers. Today, the startup is valued at $20 billion.

Palantir

Palantir is a unique "unicorn", which was created in 2004. Unlike most of the representatives of our list, it is not focused on mass consumption. Palantir is an information analysis system used by the government in the fight against terrorism, as well as banks, funds and financial firms in inner work. Due to this choice of profile, the startup took more time to conquer Olympus. Today it is valued at $15 billion.

snapchat

"Burn after reading" - this phrase perfectly describes the application created by Bobby Murphy. Videos, photos, pictures and text messages - the messenger can transfer almost everything, and after a certain amount of time, all messages are deleted. The high degree of anonymity and ease of use has made Snapchat a leader. The service was created in 2011, and today it is estimated at $15 billion.

SpaceX

One of the most remarkable people of our time, investor, entrepreneur, engineer-inventor Elon Musk in 2002 created a company whose goal is the colonization of Mars. Today, SpaceX creates vehicles for the intended purpose and performs everything for which it was designed. Ambitions and an innovative approach have led to the fact that SpaceX is now valued at $12 billion.

Flipkart

The Indian analogue of Amazon and Aliexpress was created in 2007 by Sachin and Binni Bansal. A simple, thoughtful and well-executed move in Flipkart brought its developers $ 11 billion.

The creators of the service for searching, storing and sorting Pinterest visual content have relied on the desire of a person to keep everything in front of his eyes. Therefore, a virtual board appeared, on which you can “pin” any picture you like. Social network was founded in 2008, and today it is valued at $11 billion.

dropbox

One of the best cloud storage services, whose main advantage is the ability to easily synchronize, was founded in 2007 by Drew Houston. Today, Dropbox is an ever-evolving $10.5 billion product that many corporations and businesses can no longer do without.

Theranos

Theranos, a $9 billion company, was founded in 2003. Long hard work and years of development have resulted in Theranos today offering an innovative approach to diagnostic tests that are less invasive, more effective and more representative.

The number of startups valued at more than $1 billion has quadrupled over the past two years, to almost 160. But the prospects for dozens of them are already in doubt. RBC studied three high-profile stories of the rise and fall of "unicorns"

Non-public technology companies, the value of which, according to investors, exceeds $1 billion, are called "unicorns" - the wording was proposed back in 2013 by the founder of Cowboy Ventures, Eileen Lee. Like mythical creatures, billion-dollar startups are a real rarity, finding them and investing in them is akin to a miracle, Lee explained at the time. Three years ago, there were only 39 unicorns in the world, according to Fortune magazine. However, in subsequent years, the “population” grew sharply - up to 156 projects, and their total valuation exceeded $ 550 billion, according to the Financial Times consulting company CB Insights in May 2016.

The current stars of the technology business - Amazon and Google - carried out IPOs without waiting for investors to accelerate their value to $1 billion, now they are already worth $329 billion and $485 billion, respectively. At the same time, for many startups of the latest wave, the title of “unicorn” has become an end in itself. “This is a psychologically important bar. $1 billion is better than $800 million in the eyes of customers, employees, the press,” Stuart Butterfield, founder and CEO of Slack, a corporate chat service that raised $200 million from a group of investors in 2015, valuing the entire business at $3.8 billion, admitted in an interview with Fortune. .

As a result, the speed with which startups inflate their value on paper has revived talk of a technology bubble with renewed vigor. In 2015, influential investor Bill Gurley, a partner at the Benchmark fund, delivered a keynote on Above the Crowd about the "unicorn invasion" threat. In his opinion, in pursuit of the next big thing (translated as “the next big thing”), investors do not audit startups with sufficient quality, and they, in turn, either deliberately manipulate financial performance and hide the lack of an effective business model, or they themselves do not fully understand the economics of their business. Investors who have already rushed into overvalued companies are pulling the rest in a spiral, inflating this bubble, Gurley noted.

The predictions of skeptics began to come true. In 2015, several leaders of the technology market at once faced a revaluation of their own value and the threat of business restructuring. For example, the Fidelity Foundation reduced the valuation of the Snapchat photo messenger, which had reached $16 billion by that time, and the Dropbox file hosting service by 20%, from $10 billion to $8 billion. CB Insights analysts have already counted 58 “unicorns” that have stopped growing or lost in investment value at the end of 2015.

Commission on securities and the US exchanges (SEC) and other regulators are also sounding the alarm. Estimates of almost all "unicorns" are "highly subjective," SEC Chair Mary Jo White said during a speech at Stanford Law School in March 2016. Investors created these risks themselves, she said, by not paying enough attention to asset valuation.

RBC studied the stories of three companies that had to endure a rapid rise and an even more rapid fall.

Theranos: the tale of the new Jobs

In 2003, 19-year-old Elizabeth Holmes dropped out of her prestigious Stanford class and started Theranos with the money she saved. The startup offered the market a unique technology - a blood test through the sampling of just one drop and obtaining prompt, accurate and complete results. In 12 years, Theranos went from being one of many ambitious young companies to being the biotech industry's breakthrough hope, raising $686 million. Investors and journalists in Silicon Valley were fascinated by Holmes, who quickly earned a reputation as the "new Steve Jobs" and gained status the youngest female billionaire on the Forbes list: in 2014, Theranos was estimated at $ 9 billion, and Holmes' fortune at $ 4.5 billion.

Theranos founder Elizabeth Holmes (Photo: Andrew Harrer/Bloomberg)

Everything changed in October 2015. The Wall Street Journal published an investigation from which it followed that Theranos does most of the analyzes not using its own innovative technology, but on typical laboratory equipment from other manufacturers. The publication's sources said that the results of analyzes on Holmes' technology differed significantly from those obtained on conventional equipment, and in internal correspondence, Holmes and her managers discussed the need to hide this information from the public. The scandal hit both the business reputation of Holmes herself and the company.

Several investigations have been initiated against Theranos - by the Securities and Exchange Commission and the US Department of Justice. Holmes is suspected of misleading investors and regulators. On May 11, 2016, Theranos announced an important personnel reshuffle: Sunny Bolwani, the president and chief operating officer who helped Holmes create the legend of revolutionary technology from the very beginning, is leaving the company.

In the Forbes online rating, Holmes's fortune was blown away to $ 3.6 billion. In addition, the Center health insurance, which regulates the activities of clinical laboratories, revealed violations in the California laboratory of Theranos: if the organization takes sanctions against the company, Holmes will be banned from medical research for two years.

Zenefits: license to scam

Founded in 2013, Zenefits has raised $583 million from investors in just three years and reached a $4.5 billion valuation, Forbes magazine called it “the fastest growing software company in history.” Zenefits developed HR software. The startup gave away software to other companies for free, which aggregated all information about employees, and in exchange made out for them medical insurance — required condition for the operation of any American company, too laborious for a small business that cannot afford to maintain a full-fledged HR department. Earned Zenefits, like traditional insurance brokers, on commission - about 5%, or an average of $ 450 per year from one insured "life".

Zenefits founder Parker Conrad (Photo: David Paul Morris/Bloomberg)

In January 2015, the founder and then CEO of the company, Parker Konrad, stated that Zenefits' annual revenue had reached $20 million, and in another year it would break the $100 million mark. The company employed 1.6 thousand people, which is four times more than a year earlier. However, Bloomberg Businessweek magazine soon stated: “Zenefits was the perfect startup. Then he self-destructed."

One of the former employees in an interview with Business Insider called the company's office in Arizona a "zoo": "We had a tradition: every time we closed a deal or set a new record, everyone was given shots of alcohol. At some point, we started breaking records twice a day. We should have stopped the tradition [with alcohol], but we didn't." By the fall of 2015, it became obvious that the company would not be able to meet its $100 million revenue plan, the maximum would be $63 million. The inflated staff led to inefficient work of employees, Zenefits management cut their salaries by 14% and canceled paid vacations: a company that earned on personnel management, she herself ceased to cope with internal HR, wrote The Wall Street Journal.

Problems started popping up one after another. For example, it turned out that the software that Zenefits provides to customers does not work completely automatically, as it was submitted by the company: not all insurers provide information synchronization services, so Zenefits employees often had to do it manually and in fact for free.

In addition, it turned out that the company is cheating in obtaining licenses for its insurance brokers: for example, in California, for such a job, a broker must complete a 52-hour online training and then pass an exam. Zenefits circumvented this requirement with an app for Google Chrome called Macro, which counted an employee's entire online time towards training. Also, the company did not comply with the ban on the sale of insurance licensed in one state in others. Preliminary results of an investigation into Zenefits in Washington showed that about 83% of startup brokers may not have the necessary license, BuzzFeed found out. The company faces a fine of $20,000 for each such violation, and if they occurred throughout the country, we are talking about multimillion-dollar sanctions.

In early February 2016, the Zenefits Board of Directors unanimously fired Konrad. Even the founder of the project himself voted for a new candidate - COO David Sacks. One of the first steps of the new leader was a ban on the use of alcohol at work. Soon Sachs reduced the staff itself - by 17%. So far, these emergency measures have not returned investors' faith in the project: in March, Fidelity fund wrote off part of the cost of its own investments in Zenefits, lowering the company's valuation from $4.5 billion to less than $2 billion. Despite the fact that some of the company's offices are empty, it has there are still 20,000 customers and a chance to survive - though no longer in the status of a promising "unicorn", Businessweek noted.

Evernote: a startup without a focus

Evernote, an application for structuring and storing personal and corporate information, was created in 2007 by Russian programmer Stepan Pachikov. In 2012, the project became one of the first in the list of "unicorns". At that time, the number of registered users of the service exceeded 30 million, and the total investment in the company reached $290 million. Evernote earned on paid subscriptions: free version allowed to store notes no more than 25 MB, and paid options (from $ 2.99 per month) opened up access for users to large amounts of data. In addition, the company offered a business version (about $10 per month per user) where a common "notebook" for notes can be used by all employees of the company.

Evernote co-founder Phil Libin (Photo: Haruyoshi Yamaguchi/Bloomberg)

Evernote was named "Company of the Year" by Inc magazine in 2011. Financial performance in the company itself was not disclosed, but in August 2014, the TechCrunch portal, citing sources, reported that Evernote's annual revenue is $ 36 million with an audience of 100 million people. The number of Evernote users has grown to 150 million people in 193 countries, the business version of the service by 2015 was used by about 20 thousand people. corporate clients. During the announcement of one of the funding rounds, the company announced its readiness to move into the "mature" stage of development and maintain its business model for decades.

However, in the fall of 2015, Evernote began laying off employees and cutting costs, Business Insider found out. Sources told the publication that Evernote's problems arose due to spraying on new products: for example, the launch of an application with recipes Evernote Food or PenUltimate, an application for entering written text from a tablet, etc. “We have a feeling that the management only needs constant hype in the press. But they have no idea how to optimize the business and make it grow,” one source complained to Business Insider.

The layoffs were the first step in a new belt-tightening strategy. Evernote also had to give up bonuses: the company paid for them every two weeks to clean the house, many of the developers at the company’s expense could go to work for up to three weeks abroad or ask for a “stipend” to pay for recharging an electric car, Business Insider pointed out. The company also canceled its annual developer conference, which it has held for four years in San Francisco.

As a result, by 2016, Evernote closed three out of ten offices, reduced 18% of the staff (before layoffs, about 400 employees worked in the company). In the summer of 2015, the first CEO of the company, Phil Libin, resigned, he was replaced by a native of Google, Chris O'Neill, who had led the Google Glass project for just over a year. Libin himself explained his departure to the Re / code portal by his unwillingness to lead the company in the process and after entering the IPO - Evernote still expects to return to development, however, already in the status of a public company.​

Unicorn is one of the terms that everyone who is in any way connected with financial markets. It denotes a rare mythical creature, because it translates as a unicorn. This name was taken for a reason. The thing is that this is the status of the company, which indicates that its value has crossed the line of 1 billion dollars.

We have already understood that these are companies that have reached a high level of capitalization, and for many businessmen such a “unicorn” status has become a cherished dream. But what is the distinguishing feature of these enterprises among others?

Everyone knows that a unicorn is a mythical creature. At the same time, no one can say for sure whether these animals existed before or they were really rare. These companies are like myths. They exist, but it is difficult to accurately determine whether they are real or empty. And it's all about negative cash-flow and fast capitalization. This indicates that every analyst can do a cash flow analysis and see that the company's payments are substantially higher than the receipts. Of course, this does not mean the company's unprofitable activities, since negative cash-flow is temporary.

The first time this term was encountered in 2013 in an article by one popular entrepreneur Eileen Lee, after which the word gained particular popularity among start-ups. Even the investors themselves at the first stage are not sure if the founders are capable of creating a unicorn. But practice shows that the demand for unique products is growing immediately and quickly, thus confirming the myths about magical creatures. How this happens in different countries can be seen in the figure below:

Fig.1. distribution of unicorn companies around the world

In order for a start-up enterprise to reach maximum profit very quickly and become an exponential organization or a unicorn enterprise, a scheme of several points is most often followed:

Find a big goal of world significance;

The optimal composition of the founders is more than 4 people;

A unique business model is being developed.

Naturally, the basis should be a breakthrough idea that can improve the problem situation in any area by at least ten times. In this case, it can bring high profits.

It is important to note that the fastest growing companies operate in areas such as:

Real estate;

Electronic commerce;

Services on demand.

In any case, whether you use the term unicorns, unicorns, or exponential organizations, it's clear that this is a new way of doing business. It helps to create other opportunities for aspiring entrepreneurs and even for traders, by moving to new, larger levels. Drawing conclusions, we can say that you should not adhere to conservative views, because by investing in several start-ups you can get a big profit if you are confident in the growth of its popularity in the market.

Unicorns are not difficult to attract investments, but you should be careful, because such companies manage to keep their real value secret, without giving detailed information. But if such businesses survive the rigors of the marketplace, which involves discipline and high volatility, they are not left out of the shadows.