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In this diversion we look at Unicorn companies - what are they, where are they, and why do they matter. We take a deep dive into Estonia, which has created 10 Unicorns for a population of 1.3m and unsurprisingly leads Northern Europe for VC investment.

Computer Programming

What is a Unicorn?

A unicorn is a private company with a valuation over USD 1bn. The term emerged in the 2010’s when a boom in digitalisation and venture capital funding created a growing number of highly valued start-ups.

Variants include a decacorn, which is valued at over USD 10bn, a hectocorn valued at over USD100bn, and a soonicorn valued at close to USD 1bn.

Unicorns cease to be called this once they list on a stock exchange, such as Meta or Alphabet.

How many Unicorns exist?

The number varies but as at Q4 2022 there were approx. 1,200 unicorns in the world.

Which country has the most Unicorns?

As at Q4 2022, the USA has the most unicorns with approx. 630, China ranked second with approx. 300 and India third with approx. 70.

Europe has approx. 150 unicorns according to the The UK would have the largest number in absolute terms and Estonia claims to have most per capita (see below).

Cities with the most unicorns are San Francisco, New York, Beijing, Shanghai, and London.

Which industry has the most Unicorns?

The largest industry verticals for unicorns are ICT, Financial Services, Life Sciences, Retail, and Logistics.


The largest by tech segment are FinTech, MedTech, AI, and Big Data.

Which investors have the most Unicorns?

Private equity fund Sequoia is regularly the largest unicorn investor in the world, followed by others such as Softbank, Tiger and Tencent. The top four investors have invested in approx. 50% of unicorns.

Why do Unicorns matter?

Undoubtedly they do, here are some of our takes:

Innovation – start-ups excel in creating better solutions to solve a problem, meaning they are essential to progress. This can be seen on an industry level in Life Sciences where innovation saves lives, while in others such as Financial Services innovation saves time and money.


Economic Spillovers – unicorns create significant benefits such as increased employment based on highly-paid roles, government tax take, consumption of business services and consumer products, joint ventures with academia, etc.

ROI – pension funds and governments are significant early-stage investors, meaning every successful unicorn creates capital gain.

Ecosystem Enabler – unicorns play a vital role in building tech ecosystems. In the early stages their influence can be seen in headlines, confidence, and investor interest. As exits occur, successful entrepreneurs provide vital advice, financial and social capital to help the next generation succeed.

Unicorn proof of concept?

According to Startup Estonia, in 2020 Estonia’s 1,126 start-ups generated EUR 782m turnover in Estonia, employed 6,072 people locally at year end, and paid EUR 97m in employment taxes. NB: The numbers have grown fast and are probably higher!

According to Sifted, summarising a previous report by Atomico, Estonia has the most start-ups per capita, at one start-up per 1,048 people. Estonia also captures the most VC investments per capita at €1,967.

Based on OECD data, VC investment in Estonia in 2021 equated to 38% of nominal GDP, thus approx. USD 13.2bn. This ranks Estonia #1 relative to its Northern European peer group. In 2011 the same figure was 1% of GDP, implying strong absolute growth.

Successful entrepreneurs such as Taavet Hinrikus are a key driving force. Having been Skype’s (unicorn) first employee, he co-founded Wise (unicorn), numerous other start-ups, before forming his own family office and fund with fellow super angel Stem Taamkivi, Plural Platform.

List of Unicorns in Estonia?

Estonia claims 10 unicorns based on the criteria: at least one founder at the time of founding was an Estonian citizen; the company is or has been headquartered in Estonia; and the company has or has had significant operations in Estonia.

Whether you agree with the criteria or not, the quantity and quality are impressive:

  1. – messaging, founded in 2003, unicorn in 2005.

  2. – gaming, founded in 1999, unicorn in 2007.

  3. – fintech, founded in 2010, unicorn in 2015.

  4. Bolt – mobility, founded in 2013, unicorn in 2018.

  5. – CRM, founded in 2010, unicorn in 2020.

  6. – insuretech, founded in 2016, unicorn in 2021.

  7. – regtech, founded in 2010, unicorn in 2021.

  8. Gelato – printing, founded in 2006, unicorn in 2021.

  9. Veriff – regtech, founded in 2015, unicorn in 2022. 

  10. Glia – digital customer service, founded 2011, unicorn 2022.

Is there a bubble in start-up investing?

Controversy naturally arises when early-stage companies attract a high valuation despite never having generated a profit. Nonetheless valuing start-ups is mostly sophisticated – a discounted cash flow (DCF) forecast based on ARR, CAC, long-term growth rates, etc. In some cases, such as creation of entirely new industries or business models, then valuations are more subjective.

External factors undoubtedly influence valuation, for example in H2 2022 economic and financial market conditions deteriorated leading many unicorns to raise at significantly lower valuations. Klarna’s valuation in July 2022 was USD 6.7bn versus USD 46bn in June 2021.

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