Daily Management Review

Number of unicorn startups growns at a record pace


In the second quarter of this year there were 136 new unicorn startups - more than in the whole of last year. More than half of the capital they raised in the six months was in investments of more than $100 million.

In the second quarter of this year, there were 136 more startups with valuations above $1 billion, the Financial Times reported, citing data from CB Insights. The newspaper notes that this figure was higher than that recorded for the whole of last year and set a record.

The situation is developing so that at the end of the year, start-ups may raise twice as much money as in the record year of 2020, when the pandemic accelerated the flow of capital to technology companies, writes FT. In the first half of this year, investors invested in the purchase of minority stakes in companies $292.4 billion, which is almost equal to the amount spent for this purpose for the entire 2020.

The driver of growth in financing was the rounds of investment in the largest unicorns, FT writes. Rounds of more than $100 million accounted for almost 60% of all capital raised in the first half of the year. However, this represents only 5% of the total number of deals. 

Unicorns are multiplying on the background that wealthy investors are used to paying large sums for shares in young companies, FT notes. But rising valuations could lead to heightened concerns about overheated markets and lead to targets that are difficult for start-up founders to meet.

source: ft.com