What is a Unicorn Startup?

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Overview:

According to a recent report, new additions to the unicorn list declined sharply in 2023, indicating a slowdown in the Indian startup ecosystem.

About Unicorn Startup:

 

  • The term unicorn refers to a privately held startup company with a value of over $1 billion.
  • It is commonly used in the venture capital industry. The term was first popularized by venture capitalist Aileen Lee, when she referred to the 39 startups that had a valuation of over $1 billion as unicorns. 
  • The valuation of unicorns is not expressly linked to their current financial performance, but largely based on their growth potential as perceived by investors and venture capitalists who have taken part in various funding rounds.
  • There are more than 1,000 unicorn companies around the world, as of March 2022.

 

What are Gazelles and Cheetahs in Startup ecosystem?

  • Gazelles:
    • They are those start-ups founded after the year 2000 and have the potential to go Unicorn in 2 years.
    • Their valuation ranges from US$500mn to US$1bn.
    • Once you exceed the $1 bn valuation, you become a unicorn.
  • Cheetahs:
    • They are those start-ups founded after the year 2000 and have the potential to become a Unicorn in the next four years.
    • Their estimated valuation ranges between  US$200mn to US$500mn.

 


Q1) What are Gazelles and Cheetahs in the Startup ecosystem?

Gazelles are those start-ups founded after the year 2000 and have the potential to go Unicorn in 2 years. Cheetahs   are those start-ups founded after the year 2000 and have the potential to become a Unicorn in the next four years.

Source: Slowdown visible in India's startup story as only three unicorns added in 2023: Report