We all know the stories of founders who managed to become incredibly successful with their startups in a very short time. Usually these stores have the press running wild with headlines that often involve the term “unicorn”. But … What exactly is a unicorn in a startup context?
Unicorns in the World of Startups
Startups which receive a valuation of at least a billion USD even before a potential public offer or an exit are called unicorns. Worlwide, USD are the measure that are used for that kind of valuation. So, if an investor is willing to invest ten million USD for a one percent share of the company in question, the startup has reached the unicorn status, strictly mathematically speaking.
To reach this goal, the founders must firmly believe in the success of their startup. Also, it requires a bond of trust between founders and investors that the former doesn’t seek an exit or a public offer with their valuation. The company’s financial backbone depends solely on the investors’ capital. Such an investment is risky and seems just as rare and magical as finding a real unicorn.
The term couldn’t be more appropriate for such a constellation. The statistical probability that a startup is valuated at unicorn level is currently at 1.2% in the Germany-Switzerland-Austria (GSA) territory (in comparison: EU: 1.2%, USA: 1.1%).
Unicorn Startups in Germany
Recently, there’s been a never seen before surge of unicorn valuations in Germany. The new members of the German “unicorn club” are some of the big names and players in the tech scene:
- Trade Republik, 5.3 billion USD, Berlin
- Otto Bock Healthcare, 3.5 billion USD, Duderstadt
- N26, 3.5 billion USD, Berlin
- FlixMobility, 3.0 billion USD, Munich
- Contentful, 3.0 billion USD, Berlin
- NuCom Group, 2.2 billion USD, Unterföhring
- Mambu, 2.02 billion USD, Berlin
- Personio, 1.7 billion USD, Munich
- Wefox Group, 1.65 billion USD, Berlin
Among the German unicorns which already launched on the stock market are, amongst others, Check 24, Hellofresh, Trivago, Xing and Zalando.
More Unicorns in the Future?
It is very likely that there are going to be more unicorns in Germany. Even though the phenomenon is bound to the global rate of interest and its development – which currently has a negative impact on the investment interest rate and consequently on the mass of new capital in the German startup scene –, experts predict further growth for the emergence of unicorns.
More than ten applicants for the title already have taken starting positions and might soon be able to break the billion dollar barrier. In the startup lingo, startups in this phase are called soonicorns.
Considering these positive developments, there’s already talk about a completely new type of mythical creature in the startup scene: the decacorn. Companies reaching this phase are valuated at 10 billion USD. So far, only big names such as SpaceX, AirBnb or Uber belong to this elusive club of companies. The only German decacorn is the German startup Celonis from Munich.
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