note: the author, Aileen Lee is Cowboy Ventures and founder of Kleiner Perkins Caufield & amp; Byers, partner.
in 2013, we have issued a similar unicorn club analysis report. After more than a year, based on public information sources and their own judgment, we once again issued a unicorn club analysis report, although this time no valuation billions of super unicorn, but other aspects are improved and breakthrough than normal.
in the post before, we have, most entrepreneurs and their funding behind the people have a common goal: to create a successful and influential companies, the valuation is best can more than $1 billion. We call such a company “unicorn company”, because their achievement is outstanding, rare and difficult to imitate.
$1 billion valuation is a threshold. Throughout history, top venture capital fund returns from a handful of hugely successful investment company. As most of the traditional fund size grew, they began to demand a bigger “exit” to gain considerable returns.
, for example, a $400 million initial vc fund means that exits in the valuation of the two 1 billion enterprises hold 20% stake or when an enterprise valuation 2 billion takeover or listed still holds a 20% stake.
but some people think that blindly pursue “unicorn company” will not only irritate and will change the nature of technical valuations. There are two to this, we have to reiterate:
the first, in our project, valuations are only as a screening tool, used to identify this period of development of technology companies. We the goal of this project is to learn, not the ranking. We never encourage companies to book valuation, blind pursuit of valuations artificially high will cause adverse effect to the company.
second, as said before, now of the traditional venture capital firms need to exit a unicorn in order to obtain good returns. Some investors may complain that entrepreneurs devotion to “unicorn valuation”. However, ask yourself, most investors are in this way, they even offers huge financial support for the company.
in addition, our data are based on the public resources, this is just a rough view of a certain period of time. The following experience from a set of corporate data updated:
analysis report to update the overview
1) we found a total of 84 U.S. companies in accordance with our standard of “unicorn club”. Compared with we released a report on the number increased by 115%, unbelievable. One of the factors that cause such sharp growth lies in the “book unicorn”, is the private company hasn’t be paid. Still belongs to the rare, but the branch of vc only 0.14% of total consumer and enterprise technology start-ups.
2) in the past ten years, on average every year 8 unicorn enterprises (contrast between 2003 and 2013, this decade appears four per year). From 2005 to 2015 years of this decade, although there is no a valuation of more than $100 billion a super unicorn enterprises, but the valuation 10 billion unicorn has nine companies, is three times as much as the last release data.
3) unicorn company in the field of consumer market created most of our assessment portfolio value: number and higher average valuations. The company raised a large number of private capital.
4) corporate market unicorn company less than in the past, financing is less than in the past so much; And increasing corporate finance reduces private investment returns.
5) on the business model, electronic commerce enterprise dominated, but “the lowest capital efficiency”. Enterprise and the audience of the company’s market share were slipping, but software as a service (SaaS) company’s market share has increased significantly. This time we also added a new classification mode: the Internet of things.
6) wait for the cycle is long, we statistics all the businesses, 39% had “exit”, for these enterprises need more than 7 years of time is the average cash “opportunity”, not to mention the remaining 61% is still in the state of private companies. The capital efficiency of these “private unicorn” surprisingly low, is likely to affect the future of the founders, investors and employees.
7) silicon valley experience: the founder has received a good education, understand the technology, age at about 30 years old, and business partner enterprise with a history of cooperation with each other is more likely to succeed. In their 20 s and founder of the successful transformation belongs only to a few exceptions.
8) is the bay of San Francisco’s most valuable technology company entrepreneurship center; The development of New York and Los Angeles.
9) today’s science and technology company business and the creation of value depends on the contributions of immigrants. We’re even thinking about if in the United States work visa restrictions relaxed, perhaps we can create more value.
10) unicorn background differences between founders are still very small. But the number of female founder has a tendency to rise.
deeper depth of interpretation and found:
1 ) welcome to only 84 unicorn club members: the top of the pyramid 0.14%
? This time we found 84 companies for unicorn club. A statistical analysis of the distance from the last time we just over a year and a half, 115% growth is shocking but a short time.
? The company’s total valuation of $327 billion, 2.4 times that of the last statistical analysis (excluding Facebook, was only a Facebook accounted for almost half of valuation).
? Have such a staggering total valuation because the unicorn an increase in the number of rather than a single enterprise valuation. On the list, enterprise valuation of $3.9 billion on average, compared to the last only increased by 8%.
? Book unicorn “and” the number of the total value of boom. Private companies on this year’s list with 61%, 36%) (2013 report that part of the private company’s total valuation of $188 billion, the average value of each company is $3.7 billion.
at this point, we can not help but ask why the decade to 2015 would suddenly appear so many “unicorn” enterprise? What time is the following conclusion:
a) good product it easier than ever to enter the global market, smart phones and social networks to promote information dissemination;
b) brand, size, or the network effect caused a winner-take-all market situation, the crazy growth fund fund is giving investors unusually sensitive, desperate to want to invest in the market “winners”;
c) late unusually rich source of capital: the late funds, early public investors and the global strategy and so on. The investors’ capital cost is low, than traditional venture capitalists are more likely to accept lower returns; They usually accept exit right descending cover as part of the investment, but it will not be reflected in the valuation;
d) active stock market optimism;
e) optimism of private capital market as the “book unicorn” provides shelter. When a company is not listed or exit, can choose to share more with investors, founder of the plans for the future, you can also choose to hide some facts, and lack of liquidity of equity valuations and short-term changes of constraint and so on factors contributed to the private enterprise valuation.
2 ) a year on average a and a unicorn, but in the 2005-2015 this decade did not reappear valuation billions of super unicorn enterprise
? 2007 is the best years for unicorn (23%). As shown in figure, according to a list that about 45% of the company is in the two years (in 2007 and 2009) starting a business;
? So in 2007 and 2009, what’s going on? First look at 2007: iPhone release, by the end of 2007, the United States financial crisis; Then in 2009:2009 years ago in a few months, the Android release, slide the bottom to the economy.
? Unicorn start-ups, therefore, is the best timing for: a) launched a landmark new technology platform; B) in the stock market downturn. Low rate, low opportunity cost and difficult conditions often spawned a remarkable innovation and courage.
? In addition, there are some anomalies in the list of young enterprises, such as Illumio, Oscar Health and Zenefits, these enterprises set up time is not more than 3 years.
? Every tide science and technology innovation to drive one or more super unicorn companies – the rise of valuation of more than $100 billion.
? At the beginning of the 21st century the unicorn Facebook now valuations are rising to $247 billion, increased by 102% compared with the value in the last report, it was amazing. The rapid development of Facebook now valued more than the sum of the last year on a list of other company valuations, more than this year’s list valuation for the consumer companies combined.
? This year’s list, there are nine valuation 10 billion “unicorn company”, is the last time the data 3 times. There are five is a mobile terminal enterprise (Uber, Twitter, WhatsApp, Snapchat and Pinterest).
? According to historical experience between 2010 and 2019 there will be one or two is enough to affect the development of key technologies in the next decade trend: mobile network super unicorn.
3 ) consumer companies still created the total value of the vast majority of
? Consumer-facing companies created us list valuation 72% (compared to the last is 60%). On the list this year, 55% of the company belongs to the consumer, valued at $5.1 billion on average.
? Valuation of the top eight of the ten companies is consumer companies.
? When the founder of confidence in their own company look forward to great success, they may not realize how long the future road; Or don’t know the price of liquidation preference.
? List consumer-facing companies an average of $535 million in six rounds of private activity, increased by 54% than the last. There are 7 consumer companies private equity funds to more than 1 billion respectively.
4 ) an enterprise company situation than usual
? An enterprise company valued at $2.5 billion on average, less than half the consumer companies.
? These companies private $247 million on average, increased by 79% compared with last time. But the average capital benefit is greatly reduced.
5 ) in addition to the original four main business models, the Internet of things together as a new mode, and so did the value growth, network effects, as always, the important
? E-commerce companies (consumers pay for goods or services via the Internet or mobile end) still created the value of the most significant (36%); They also have the most private financing ($683 million) on average, but the lowest capital efficiency. May be the increasing relative to other areas of competitors and market cost, and the low marginal profit factors lead to the low valuation of the open market.
? Audience companies (free for consumers, through advertising or other ways to profit) created the second value (27%), while only 17% in this year’s list of such enterprises, however, an average of $352 million.
? Enterprise software service class (corporate customers pay for large-scale software company), an average of $268 million, made the list with 17% of total value.