The startup scene is getting fiercer than ever. With a new startup being launched every day, it has become a tough battle of survival of the fittest. This mad race has resulted in the birth of a new kind of startups called the unicorn companies. Sounds bizarre? Well, it’s funnily not.
Unicorn companies are startups with billion dollar valuations. Though they are very few and rare to find but they surely do exist in the market. What is more bizarre is that there is a new venture capital in town called the Unicorn Capital Partners which is only focused on funding unicorn companies. Yes, you read it right. A unicorn Venture Capital to fund Unicorn companies.
According to some reports going around, the China-based Unicorn Capital Partners have already raised a whopping $12 million to fund tech startups in Asia.
According to the Venture Capitalist’s LinkedIn page, it “focuses on investing and partnering with the leading and emerging venture capital fund managers at the start of the Age of the Unicorns.”
The term “unicorn” first came into existence in November 2013 when Aileen Lee used it for the first time in a post for TechCrunch. Lee, back then, narrowed down some 39 unicorns. All these unicorn companies were United States based software companies founded in the year 2003 or later, with valuations from public or private market investors worth $1 billion or more.
Currently, according to the Wall Street Journal’s “Billion-Dollar Club” list, there are about 100 of such Unicorn companies.
Some Silicon Valley investors and observers see this sudden increase in numbers of tech unicorns and their startups’ valuations, and the amount of money being raised by Silicon Valley startups as a dangerous signal of a looming tech bubble. According to a a few, this tech bubble could possibly mirror the dot-com bubble that originated in the late 90s and fizzled out by early 2000s.
Recently, investors like Y Combinator’s Sam Altman and Benchmark’s Bill Gurley have opinionated their concerns about the current condition of venture capital funding. Altman recently reminded the startups the need to keep their burn rates low as high startup burn rates is one parameter that investors are using to conclude if or not the tech-bubble talk is something real and substantial.