Unicorn companies are startups and businesses valued at over 1 billion dollars by investors, not listed on the stock exchange. The Wall Street Journal tracks them online.
There are 16 billion-dollar European startups among the largest in the world: many German, many British, some Swedish. None Italian. The unicorn company ranking is compiled and kept up to date by the Wall Street Journal together with Dow Jones VentureSource.
Spotify is a music streaming service that offers users on-demand access to millions of tracks. The company aims to make all the world's music instantly available to everyone, wherever and whenever they want. Spotify makes it very easy to discover, manage and share music with friends, while ensuring that artists receive fair remuneration. Co-founded in 2006 by Swede Daniel Ek, the company offering an on-demand music streaming service was valued at 4 billion dollars in November 2013 and had raised 521 million dollars in funding. Those figures have since doubled. A success generated by the talent of a young Scandinavian who became a millionaire at 23 by selling an online advertising company in Sweden, and subsequently decided to create a music service as an alternative to illegal ones. Today it has 125 million audio tracks and 175 million active users, split between premium subscribers — at 10 euros a month — and free users who see adverts: it has thus become the world's largest subscription-based music platform. While Apple and Amazon are following its lead, Spotify is now preparing to acquire SoundCloud.
Ranking as high as second among the highest-valued European unicorn startups is Germany's Delivery Hero, co-founded in 2011 by Swede Niklas Östberg (and valued at 1.9 billion dollars in February 2015). After launching a platform in 2007 for ordering pizza online in his native Sweden, Niklas Östberg decided to apply that business model to food in general and to extend the offering across the whole of Europe. With the help of friends and German venture capital he founded Delivery Hero, an online food ordering service. Having expanded across Europe, the company is now growing into Latin America, Asia and Australia, and is currently present in 23 countries.
It offers users a new way to cook. Each week, users can choose the recipes they want to try and the company will send the recipes along with all the ingredients needed to prepare them.
Dutch company Adyen is an international provider of online, mobile and point-of-sale payment solutions. Headquartered in Amsterdam, it was co-founded by Peter van der Does in 2006. It focuses on maximising payment conversion and excellence in reporting. Adyen supports the leading payment methods across Europe, the United States, Asia and Latin America and continues to expand.
Klarna's vision is to foster trust and to offer a frictionless online shopping experience. It offers secure, easy-to-use payment solutions for online stores, with the ambition of making e-commerce safer, simpler and more enjoyable. At the heart of Klarna's services is the almost revolutionary concept of paying after delivery, which allows buyers to receive the goods they have ordered before any payment is due. At the same time, Klarna takes on all credit and fraud risk, so that sellers can be certain they will always receive their money. The startup has enjoyed an almost doubling of its value compared with 2014, when it stood at 1.4 billion dollars, probably because it appears to be gearing up to launch in the United States, which is, as is well known, a country of credit cards.
It is a German company founded in 2000, a pioneer in RNA-based medical technologies. It has developed immunological cancer therapies and vaccines under the RNActive brand, and is now researching molecular therapies.
It is a flight search engine that aims to let users navigate by price and destination. Additional tools such as charts and applied fares allow users to compare flight prices on a given route over a period of months, or the price of weekend flights from any city. The site is multilingual, offering searches in 20 languages including Chinese, Russian, Portuguese, Polish, Spanish and Japanese. Skyscanner does not sell flights directly; instead, the site is used to find the best deal. Today it has 800 employees of 50 nationalities. The mobile app has been downloaded 50 million times, in 30 languages and 70 currencies. Since the year of its founding in 2003, it has grown exponentially without interruption. For seven years it has recorded double-digit increases in both traffic and revenue. One of the secrets of CEO Gareth Williams has been to combine the search engine with a rich body of narrative and journalistic content, lists and photographs, so as to be constantly picked up by other websites (the 20 most beautiful riverside cities, the most colourful villages, and so on).
They started with what could have been mistaken for a simple USB stick, but which in reality contains a tiny miniature laboratory inside, capable of sequencing DNA in a matter of seconds. Its name is MinION and the company behind it is the startup led by Clive Brown. The scientific principle on which the product is based is the same one that gives the company its name, namely the use of nanopores (organic molecules with a sort of central hole one nanometre in diameter, 1nm=10⁻⁹m). Price: $900. Using the same technology, it would be possible to sequence an entire human genome in 15 minutes (the first sequencing of the human genome carried out by Craig Venter's Celera Genomics took more than a year).
Immediately after the technology was presented in 2012, shares in Life Technologies and Illumina, giants of the sequencing market, suffered a significant fall of 6% and 3% respectively. Roche attempted a hostile takeover of Illumina and was said to have its sights set here too.
It is an online community that connects drivers with empty seats to people looking for a lift (or to travellers and commuters heading in the same direction). It has created a new way of travelling for passengers every month. To ensure the quality of the match between drivers and passengers, the site displays preferences: smokers or non-smokers, pets accepted in the car or not.
Entrepreneurs Christian Bertermann and Hakan Koç created an online used-car exchange platform in 2012 to help connect buyers with sellers.
In 2014, investors Kinnevik and Rocket Internet joined forces with five online fashion retailers focused on emerging markets — Dafiti, Lamoda, Zalora, Jabong and Namshi, each with different regional targets. The e-stores Kanui and Tricae, focused on Brazil, were subsequently added. Today Global Fashion Group serves 27 countries with over 2.5 billion inhabitants, faces a market worth 630 billion euros, but is struggling to become profitable.
An online sales platform operating in the luxury segment. The startup is based in London, deals in clothing for independent fashion boutiques with high-end clientele, and recently completed a new investment round that brought its valuation to over one billion dollars.
It allows hundreds of boutiques to sell their goods online without the complications of learning e-commerce and web design in order to set up a fully functioning website of their own. Jose Neves, the founder and CEO, furthermore claims that the products on his site cannot be found anywhere else online.
Taavet Hinrikus's startup was born as a peer-to-peer money transfer service. It works by matching transactions of corresponding amounts between users in different countries, in order to avoid the costs of international currency transfers. TransferWise can be used online or via mobile app, has around 1 million users moving $750 million globally per month across 600 currency routes. Its fees are currently very low, but it operates in a highly competitive market, up against giants such as Western Union, MoneyGram, PayPal's Xoom and, of course, banks and bank transfers.
Founded in 2013 by William Shu, it now operates through 12 companies in 84 cities across Australia, Hong Kong, the United Arab Emirates and many European countries. Its 20,000 delivery riders ferry food from 16,000 restaurants.
A London company founded in 2002, creator of a phenomenal app capable of identifying the title and artist of a song heard on the radio or in the street. Founder Chris Barton capitalised on one of the most recurring questions in modern history — "what song is that…" — by developing a remarkably sophisticated sound-histogram recognition technology. Shazam Entertainment Ltd. also created one of the world's first iPhone apps, ready for the App Store's debut in 2008.
Before smartphones, people could dial a number, call Shazam, hold the phone up and receive a text message with the title and artist of the track, at a cost of 75 cents. Shazam then began selling mobile ringtones, and now earns commission on online song purchases. CEO Rich Riley currently states that Shazam influences 1 in 10 online song purchases. However, the shift towards streaming music could hurt them. It is worth noting that the company's name has entered everyday vocabulary: to "Shazam" the song heard in that shop or in the TV advert.
The system devised by this London startup is called peer-to-peer lending. The startup, with a significant commercial presence in the United States, runs a marketplace that allows individual investors to make loans to small businesses, bypassing the banks. It prides itself on offering small business owners more favourable terms and faster service than banks. Since its founding in 2010, Funding Circle has channelled around $1 billion in loans to 8,000 businesses in England and the US. It operates exclusively in pounds and dollars. To reduce risk, loans are granted only to businesses that have been trading for over seven years, are profitable, have cash liquidity and between 10 and 20 employees. The company relies on data analytics technologies to filter high volumes of applications, identify creditworthy borrowers and grant loans quickly.
It is something of an outlier in the group, as it is certainly not a fledgling startup, being one of the largest and earliest companies in the antivirus field. Founded as far back as 1988, it recorded significant leaps forward in 2010, when Summit Partners acquired a stake for $100 million, and in 2014, when a series of cyberattacks on major companies sent profits soaring to $217 million. The company is reportedly considering a stock market listing, either in the US or in Europe.
The Wall Street Journal ranking is dynamic, meaning that just as there are new entries, there are also departures, some of them spectacular. Unlisted startups that were once unicorns — that is, valued at over 1 billion dollars — and can no longer be.
Home24, the German rival to Ikea, also backed by Rocket Internet, suffered a drastic cut to its estimated value in September 2016 and consequently left the unicorn club.
Things went worse for Powa. A year ago the British startup was the second European company to be found in the Wall Street Journal's list (ranked 26th worldwide). Founded in 2007 by Dan Wagner, in November 2014 it was valued at 2.7 billion dollars and had raised a total of 156 million dollars in funding to develop mobile payments and customer data management. It went bankrupt in 2016 when it failed to repay its largest investor, Wellington Management, 60 million dollars owed. The ruinous speed of its demise shows just how difficult it is to break into the mobile payments market, already crowded with giants such as Google and Apple, which are pushing to become people's mobile wallets themselves.
A very different story for the German companies Zalando and Rocket Internet.
Zalando, an e-commerce multinational that sells shoes, clothing and other fashion products, made its stock exchange debut in 2014. In the days immediately preceding it, it had reached a valuation of around 5.77 billion dollars. The company was increasing its revenues by 20–25% per year and hiring on a large scale.
The other German company, Rocket Internet, among the very first billion-dollar European startups in the ranking created by the Wall Street Journal, also exited it because it floated on the stock exchange in September 2014. An interesting model: a startup that decided to believe in and bet on other startups, and which, before listing on the stock exchange, had already managed to raise 1.5 billion dollars from equity.
