A new report from Scale-Up VC, a Palo Alto, Caifornia based vanguard venture capital firm, analyzes the unicorn market, a term used to describe a privately held startup company with a value of over $1 billion. The report, titled “Investing in Unicorns in 2020,” goes through over 500 unicorn companies worldwide and examines the market on a macro level to determine which factors result in the greatest growth potential or greatest risk.
In the last seven years, the number of unicorn companies has grown by over 1200 percent, with the USA producing 40 percent of the world’s unicorns despite only holding 4% of the world’s population. Silicon Valley has shown to produce the most unicorns, with China producing at a high level as well, though nationalization schemes and regulatory risks has left 80 percent of Chinese unicorns vulnerable.
The report concludes by predicting that unicorns based in Silicon Valley, valued between $2 billion and $5 billion, and working outside the health care sector will deliver optimal return on investment. Additionally, a few secondary-market brokerages have recently started promoting unicorn funds which has shown to be the best means for incoming investors looking to enable new entrants and penetrate the booming unicorn market.
“In the tech world they say that information is most powerful when it’s free, and we’ve recently invested substantial time and energy to better understand the unicorn market. That knowledge is too valuable to keep to ourselves, when it could help so many family offices, early-stage VCs, and angel investors who are still grappling with the vast and fluid unicorn market. In order to maximize everybody’s gains and help the market to mature, we wanted to share what we’ve worked so hard to learn,” explained Alex Lazovsky, Co-Founder and Managing Partner of Scale-Up VC.
