unicorns, startups & giants: understanding the phenomenon

WhatsApp$19B??

We looked at a set of 60 technology Unicorns with a total valuation of over $230 billion.

*as of April 10, 2014

The number of billion-dollar startups increased 67% from 2012 to 2013.

Key Findings

The number of billion-dollar startups increased 67% from 2012 to 2013.

47% of Unicorns are pre-IPO, with a total market cap of over $80 billion.

Key Findings

The number of billion-dollar startups increased 67% from 2012 to 2013.

47% of Unicorns are pre-IPO, with a total market cap of over $80 billion.

Corporate acquisitions totaled $36 billion.

Key Findings

The number of billion-dollar startups increased 67% from 2012 to 2013.

47% of Unicorns are pre-IPO, with a total market cap of over $80 billion.

Corporate acquisitions totaled $36 billion.

Unicorns are a new class of market actor, shaping the competitive landscape in areas that are adjacent to or completely different from the dominant incumbents.

Key Findings

For Incumbents, Unicorns seem to move very quickly from meaningless to disruptive.

But for wealthy Giants, Unicorns represent great opportunities.

$32.5B – The amount that carriers lost to messaging services from texting fees, in 2013.

$54B – The amount they are projected to lose in 2016. *Ovum Limited

For Incumbents, Unicorns seem to move very quickly from meaningless to disruptive.

But for wealthy Giants, Unicorns represent great opportunities.

$32.5B – The amount that carriers lost to messaging services from texting fees, in 2013.

$54B – The amount they are projected to lose in 2016. *Ovum Limited

WhatsApp$19B

For Incumbents, Unicorns seem to move very quickly from meaningless to disruptive.

But for wealthy Giants, Unicorns represent great opportunities.

There is a shift in the lifecycle of new technology companies…

There is a shift in the lifecycle of new technology companies…

A note on valuations…

There is a shift in the lifecycle of new technology companies…

There is a shift in the lifecycle of new technology companies…

The pre-IPO phase is getting longer.

There is a shift in the lifecycle of new technology companies…

The pre-IPO phase is getting longer.

Private capital is funding growth without market review.

There is a shift in the lifecycle of new technology companies…

The pre-IPO phase is getting longer.

Private capital is funding growth without market review.

Private investors are out-spending corporate M&A by 2:1.

There is a shift in the lifecycle of new technology companies…

The pre-IPO phase is getting longer.

Private capital is funding growth without market review.

Private investors are out-spending corporate M&A by 2:1.

The largest profits are privatized, and book-keeping is opaque.

There is a shift in the lifecycle of new technology companies…

“In the last 15 years the number of public companies in the US has dropped from 8800 to 4200. So what’s happening is the public market is collapsing.” – Marc Andreesen

And yet, Unicorns are incredibly valuable to web-native Giants.

And yet, Unicorns are incredibly valuable to web-native Giants.

The 30 top public tech companies have ~$180B of cash but can also leverage the value of their stock to gain purchase power.

And yet, Unicorns are incredibly valuable to web-native Giants.

The 30 top public tech companies have ~$180B of cash but can also leverage the value of their stock to gain purchase power.Incredibly high-profile acquisitions – WhatsApp $19B, Nest $3B, Oculus $2B, Airwatch $1.5B, Waze $1.1B, Instagram $1B…

And yet, Unicorns are incredibly valuable to web-native Giants.

The 30 top public tech companies have ~$180B of cash but can also leverage the value of their stock to gain purchase power.Incredibly high-profile acquisitions – WhatsApp $19B, Nest $3B, Oculus $2B, Airwatch $1.5B, Waze $1.1B, Instagram $1B…These acquisitions buy growth, audiences, and a share in adjacent markets.

Adjacencies are opportunities that sit outside of the current focus of the core business. They include some of the most interesting and valuable markets.

Adjacencies are opportunities that sit outside of the current focus of the core business. They include some of the most interesting and valuable markets.

Google’s acquisition of Nest.

Adjacencies are opportunities that sit outside of the current focus of the core business. They include some of the most interesting and valuable markets.

Google’s acquisition of Nest.

Facebook’s purchase of WhatsApp.

Adjacencies are opportunities that sit outside of the current focus of the core business. They include some of the most interesting and valuable markets.

Google’s acquisition of Nest.

By their very nature, Unicorns exist in adjacencies.

Facebook’s purchase of WhatsApp.

Adjacencies are opportunities that sit outside of the current focus of the core business. They include some of the most interesting and valuable markets.

Google’s acquisition of Nest.

By their very nature, Unicorns exist in adjacencies.

And web Giants seem to know how to use them.

Facebook’s purchase of WhatsApp.

29 France Telecom - Orange restricted

Valuation of tech Unicorns by sector

*as of April 10, 2014

30 France Telecom - Orange restricted

Valuation of tech Unicorns by sector

*as of April 10, 2014

Yelp $4.8B IPO Groupon $4.0B IPO Uber $3.5B -> $17B private company!

31 France Telecom - Orange restricted

Valuation of tech Unicorns by sector

*as of April 10, 2014

LinkedIn $20B IPO ServiceNow $7.2B IPO

Yelp $4.8B IPO Groupon $4.0B IPO Uber $3.5B -> $17B private company!

32 France Telecom - Orange restricted

Valuation of tech Unicorns by sector

*as of April 10, 2014

Palantir $9B PrivateSplunk $7.7B IPONest $3.2 M&A

Yelp $4.8B IPO Groupon $4.0B IPO Uber $3.5B -> $17B private company!LinkedIn $20B IPO

ServiceNow $7.2B IPO

What is the rationale behind these valuations?

For the most part, they align with deep trends and emerging market adjacencies.

What is the rationale behind these valuations?

Travel, consumer goods, payments.

Some challenge legacy regulatory environments.

Attacking weaknesses in incumbent models.

Empowering sellers and buyers.

eCOMMERCE $48.2B

ENTERPRISE $46.6B

“The entire enterprise software stack is getting reinvented right now, and there’s a trillion dollars up for grabs.”

- Roger Lee, partner at Battery Ventures.

Collaboration, security, and talent acquisition.

Reconfiguring and unbundling enterprise IT.

Many have already gone into public exits. Most are older.

ENTERPRISE $46.6B

Organizing data and extracting meaning.

Most are enterprise-facing, except Nest and Waze.

49% of market value in this sector has already gone IPO.

Waiting for an AI/machine learning Unicorn.

BIG DATA $40.7B

Storage, network intelligence, security.

Steady migration of sw & hw into the cloud.

Unicorn potential for turn-key solutions that assist cloud deployment . Cloud and networks are becoming more flexible and adaptive.

CLOUD $34B

Facebook and Twitter ecosystems.

New Unicorns will leverage machine learning to draw insights from their data. Social graphs will migrate into wearables and the emerging Internet of Things. We can expect significant M&A activity in this area.

SOCIAL $30.3B

This sector is exposed to disruption by other geographies.

Content, communication… and device management.

Changing behaviors in messaging.

Proliferation of devices on enterprise networks.

Future mobile Unicorns might be expected to appear in mHealth and wearables.

MOBILE $23.3B

Streaming, capture, and immersion.

Major incumbents and web Giants like Netflix constrain younger players. GoPro and Oculus drive bandwidth to serve highly immersive, rich media experiences.

Opportunities for gaming?

MEDIA $10.2B

Mapping adjacencies in 2020: where the next wave of Unicorns will likely play.

Ubiquitous computation Hardware proliferation Virtualization Communication Identity Context and predictive

Mapping adjacencies in 2020: where the next wave of Unicorns will likely play.

http://theunicornreport.com