Startup Dictionary
Unicorn
Definition
A privately held startup company valued at over $1 billion.
Deep Dive
A Unicorn is a privately held startup company that has achieved a valuation of over $1 billion. The term, coined in 2013 by venture capitalist Aileen Lee, highlights the extreme rarity and magical nature of such companies in the startup ecosystem, similar to the mythical creature. This valuation is typically determined through successive rounds of venture capital funding, where investors inject capital in exchange for equity, thereby establishing a market-implied value for the entire company. Achieving unicorn status is a significant milestone that symbolizes exceptional growth, market disruption, and substantial investor confidence.
Examples & Use Cases
- 1SpaceX, a privately held aerospace manufacturer and space transportation services company, achieved a valuation far exceeding $1 billion through multiple funding rounds, signifying its unicorn status
- 2Stripe, a financial technology company specializing in online payment processing, reached unicorn valuation based on its disruptive platform and rapid adoption by businesses worldwide
- 3Airbnb, the online marketplace for lodging, became a prominent unicorn years before its eventual IPO, demonstrating massive market disruption and growth potential.
Related Terms
DecacornSoonicornValuationSeries D+