What does it take to make a unicorn?

Top Business Tech looks at what makes a unicorn and some organisations with great potential to achieve unicorn status in the UK.

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Despite facing the obstacles from the start of 2021, it has been an exciting and successful year so far for startups. Investors have continued to become more invested in small and medium-sized startups in the tech and innovative sectors.

What is a unicorn?

So, what exactly gives a company unicorn status? When a venture capital company’s net worth reaches the US$1bn mark, they are called a “unicorn” company. The founder of CowboyVC, Aileen Lee, popularised the term by calling privately held companies that achieved this threshold a ‘unicorn’ company.

Not so rare

Over the last six years, the number of unicorn companies has increased year on year. In 2016 there were only 23 companies to achieve unicorn status. In 2018, 122 companies accomplished this goal, and in the best year so far, 2021, has over 186 companies reach unicorn status. A recent study has shown that most of the companies that have achieved unicorn status are software companies and the rest are either hardware or product & services companies. There are now 31 active unicorns headquartered in the UK, and 10 have exited the private market since achieving unicorn status. In 2021, some UK-based companies that became Unicorns are Starling Bank, Only Fans and Touchlight Genetics.

Tech companies with unicorn potential

Now, let’s look into some potential tech unicorns from the UK. To identify these next tech Unicorns, you need to focus on companies with a current value of between $250mn and $1bn.

1. Thought Machine

Thought Machine was created in 2014 by Paul Taylor. The company made a cloud-based technology that powers the new generation of services on behalf of both old and new banks. Banks can configure the software solution to provide any product, user experience, operating model, or data analysis capability. They have done this by deploying Vault, which has been created purposefully as a cloud-native platform, and it does not contain any legacy or pre-cloud technology. In addition, Vault has been written entirely in-house at Thought Machine, and so the whole system integrates smoothly as the result of a single, coherent design.

Thought Machine was initially valued at $143mn at the time of its Series A round in 2014 and is currently believed to be worth between $220mn and $320mn, giving it a real potential to become a unicorn in the next few years.

2. Tripledot Studios

Next up, we have, Tripledot Studios which is a mobile gaming company.

Tripledot was founded in 2017 when three friends decided to join forces and create a new kind of games studio. Tripledot is a fast-growing studio, led by industry veterans from some of the biggest names in mobile games. Their mission is to bring the knowledge and experience of a chart-topping mobile games company into a close-knit, collaborative environment. The teams drive projects together from conception to launch in an indie-style process combining creativity and data to make games that everyone can enjoy.

In April 2021, Tripledot Studios said it has almost hit the value of $500mn. I suggest you keep an eye on this startup that is running to become a unicorn in the next few years.

3. Wejo

Finally, we have Wejo, which is a global leader in connected car data.

Since 2014, Wejo has made it simple and secure to share and access connected car data globally. But, Wejo is more than a data exchange platform. They believe in using data for good. That’s why they innovate with ground-breaking products and services to revolutionise how we live, work and travel. Wejo is at the forefront of this data burst, enabling many businesses and governments to develop products and offerings that benefit peoples’ lives and drive revenue and power innovations.

In 2021, Wejo made a deal with Virtuoso Acquisition Corp, which values the British company at $800mn. With this new deal, Wejo is getting closer to becoming a Unicorn in the next year or two.

How can my organisation become a unicorn?

To find out what it takes to become a unicorn in this day and age, Emily Bauer interviewed many growth leaders and founders who have already become unicorns. Bauer pulled some of the key points from these interviews and wrote an article to show what unicorns have done to get to where they are. Here are some of the key points from her article:

The organisation needs to offer a simple solution to an already existing problem.
Even if they are not the first to the market, they have a distinct position.
Unicorns have the right people, skills, tools, and data to make great ideas happen. Investors will want to see that the company is serious about pursuing the idea whether they have funding or not.
Unicorns are often thought of as companies that come out of nowhere and grow fast. But that doesn’t mean the founders achieved success overnight. They’ve likely been working towards this milestone, in some form or another, for a very long time.
To drive unicorn-level growth, an organisation’s product needs to have mass appeal. You cannot scale if you can’t capture a larger market, which is why it’s so important to optimise for the casual user if you’re serious about driving growth.
No rule says you need to be wildly profitable to become a unicorn. The key is to find the right balance between incoming cash flow and what you reinvest in your business. Instead of growing your margins to impress investors with fast ROI, focus on perfecting your product.
If you want to be a unicorn, you need to act like one from the start. Create a strong foundation that can support rapid growth so that when things do take off, you can scale with confidence that your business and team can keep up the pace.

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Amber Donovan-Stevens

Amber is a Content Editor at Top Business Tech