25 - 02 - 2018
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Komissarov Nikita Aleksandrovich, Faculty of International Economic Relations, 2nd –year Student, Financial University, Moscow, Russia

Комиссаров Никита Александрович, факультет международных экономических отношений,

2й курс, Финансовый университет при Правительстве РФ, Москва, Россия

Tretyakova Galina Viktorovna, Ph.D., associate professor.

Третьякова Галина Викторовна, кандидат педагогических наук, доцент

The article provides an information of the relatively new term – unicorns, young companies with total valuation of $1 billion. The author describes the definition itself, geographical spread of such companies, the most popular industries in which they operate, the potential risks and opportunities of investors while putting up into unicorns.
Данная статья дает информацию об относительно новом термине – единорогах, молодых компаниях с суммарной оценкой в 1 миллиард долларов. Автор статьи раскрывает само определение, географическое распределение данных компаний, самые популярные сферы деятельности, потенциальные риски и возможности инвесторов при инвестировании в единорогов.

Key words: private company, economy, unicorn company, geography, industry, risk, opportunity.
Ключевые слова: частная компания, экономика, единорог, география, сфера деятельности, риск, возможность

In the modern world there are many large companies. Such giants as ExxonMobil, Ford, J.P. Morgan Chase, HP, Samsung and many others are known if not by everyone, then for almost everyone. These companies have a long history. For example, the ExxonMobil oil heavyweight exists since 1870, and Samsung began with the production of rice flour in a small town, then helping to rebuild post-war Korea, engaging in industry, providing banking services and the creation of military equipment. Financial institutions from the Wall Street have no less history than some countries in the world, like The Bank of New York Mellon.
But in the world there are other companies that have been able to reach the top in a much shorter period of time, so-called unicorns.
The relevance of the topic of unicorns is especially great today, for the 3 years more than 158 such companies have appeared, and at the moment there are at least 267 unicorns with total valuation of almost $1 trillion. [1,2]
The term ‘unicorn’ usually refers to a startup organization, which in a relatively short period of time managed to get a valuation of $1 billion, such as Spotify, DJI, Evernote and Lyft.
The concept itself is quite young, as such companies have appeared recently. It was introduced by Eileen Lee, an American venture investor, in 2013, choosing a fairy tale animal to represent the statistical rarity of such successful enterprises. [3]
Among the ‘unicorns’, those who provide services for business are relatively low, since only 2 out of the 10 most successful companies are focused primarily not on individuals2. According to statistics prepared by TechCrunch, it takes about 7 years for unicorns to be bought by larger company or to conduct an IPO.
According to statistics prepared by TechCrunch about 90 unicorns came from China while in late 2015 this number was almost 3 times smaller according to the data from VentureBeasts.
Besides China is rapidly increasing the number of its unicorns, the USA are still the highest covering almost half of all current unicorns. And of course about half of this number is taken by California with Silicon Valley located there.
Europe is unfortunately known for its lack of startups that can be called neither unicorn nor emerging. They can be counted on fingers: French BlaBlaCar, British Global Switch and some other companies.
Speaking about the spheres of organizations activity, there are a lot of them, but the absolute majority is concentrated in three spheres: software, the consumer Internet and e-commerce. On the attached graph (Fig. 1) it is seen that financial services, healthcare and transportation are popular spheres as well.

Fig. 1. Areas in which the current unicorn companies operate

Рис. 1. Сферы, в которых работают текущие компании-единороги

Following the term 'unicorn' 'unicorpse' appeared, which literally translated as 'the dying unicorn'. For example, venture investor Marс Andressen on Twitter said that startups with a high rate of capital flight can be paralyzed as they expenses are growing too fast, and Bill Gurley said that the absolute absence of fear with a very high probability will sooner or later lead to the appearance of ‘dead unicorns’. [4,5] In fact, a kind of "bubble" is created that can be explored if it is heavily infilled.
But there are many advantages of the idea to invest in unicorns. At the very least, the main and in fact the only opportunity for an investor is that unicorns grow faster than industrial conglomerates, enterprises or state-owned companies, annual growth can reach thousands of percent, which leads to huge profits. From some point it is a potential opportunity to get a stake in the company and even gain access to still uneducated market.
Thus, summing up a certain result, unicorn companies are a relatively recent phenomenon, which indicates a lack of knowledge of this subject from a theoretical point of view.
Speaking of the rarity of such companies, it is worth noting that their number grows very quickly due to the fact that technology and related fields are becoming more popular and profitable and more people are trying to get the most of it. So, as it was already said before, there are over 260 unicorns around the globe. While 10 years ago such organizations appeared very rarely, the examples of such companies could be Google and Facebook. New companies break into the market much faster than the previous ones, and their evaluation grows not just quickly, but tens of times faster. If Google (1998) took 8 years to get an estimate of 1 billion, then Facebook (2004) – 5, and Snap Inc. (2011) a little over a year, which is even more impressive in comparison with other Fortune 500 companies, where this figure is approximately equal to 20 years. The number of spheres these companies are working in is huge but concentrated and prioritize mainly individuals rather than business.
At the moment, despite the existence of a relatively large number of companies of this kind in comparison with the end of the 20th century, the phenomenon itself is still rare and for the most part refers to companies that are very closely related to the technological sphere.
Finally, in addition to the huge potential these companies can bear future crises, because too overpriced companies can lead investors to losses, and the companies themselves to ruin.

References:

1.Koetsier J. There are now 229 unicorn statups with $175B in funding and $1.3T valuation // VentureBeat, 2016 URL:https://venturebeat.com/2016/01/18/there-are-now-229-unicorn-startups-with-175b-in-funding-and-1-3b-valuation/
2. Crunchbase Unicron Leaderboards // TechCrunch, 2017 URL: https://techcrunch.com/unicorn-leaderboard/
3. Lee A. Welcome To The Unicorn Club: Learning From Billion-Dollar Sartups // TechCrunch, 2013 URL:https://techcrunch.com/2013/11/02/welcome-to-the-unicorn-club/
4. Erin Griffith, Bill Gurley predicts 'dead unicorns' in startup-land this year // Fortune, 2015 URL: http://fortune.com/2015/03/15/bill-gurley-predicts-dead-unicorns-in-startup-land-this-year/
5. William Alden, Marc Andreessen Sounds Warning on Start-Ups Burning Cash // The New York Times, 2014 URL: https://dealbook.nytimes.com/2014/09/25/marc-andreessen-sounds-warning-on-start-ups-burning-cash/
6. Третьякова Г.В., Усманова К.Н, Влияне гражданского общества на экономику в условиях санкций – актуальные аспекты современной науки. Сборник материалов IX-й международной научно-практической конференции (г. Липецк, 28 декабря 2015г.) / Отв. Ред. – Е.М. Мосолова – Липецк: «РаДуши», 2015, с.46.

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