Where do unicorns come from? As the global tech economy expands, Silicon Valley might not dominate forever
Back in 2013, all of the world’s unicorns came from just four ecosystems. Now they hail from more than 80, according to Startup Genome.
The global startup economy is becoming increasingly democratised, with successful tech ventures springing up from more ecosystems than ever before, according to this year’s Startup Genome Global Startup Ecosystem Report.
The report found that the emergence of so-called ‘unicorns’ was becoming less concentrated, suggesting reduced reliance on established hubs like Silicon Valley, London and Beijing.
Back in 2013, when the term ‘unicorn’ was first popularised, it was used to label private companies with valuations of US$1 billion or more, or ones that had secured US$1 billion exits. The name referred to the power, majesty and myth of such business.
But, “while they are still powerful, they are not so rare anymore”, the Startup Genome report notes.
According to the report, in 2013 all of the world’s unicorns came from just four ecosystems. It doesn’t specify exactly which ecosystems those were, but I reckon we can make a pretty good guess. Ahem, hello Silicon Valley.
By 2014, unicorns were cropping up in 23 different ecosystems. By 2015, they came from 34.
Today, more than 80 ecosystems around the world are home to tech unicorns.
The report also highlights the threshold of an ecosystem generating $4 billion in ecosystem revenue, likening it to the four-minute mile.
In a somewhat tangential reference, the report tells the story of Sir Roger Bannister, who in 1964 became the first person to run a four-minute mile — something previously believed to be impossible.
“Once he showed it could be done, the same barrier was broken by John Landy, an Australian runner, only 46 days later. And as Bill Taylor relates in a Harvard Business Review article, just a year later three runners broke the barrier in the same race,” the report notes.
“As more cities around the globe become viable startup ecosystems, we think a similar thing might be happening,” it says.
The 2020 report has identified more than 70 ecosystems that created more than $4 billion in value. That’s almost twice the number identified in 2019.
Last year, Startup Genome predicted 100 cities would cross the $4 billion barrier by 2029.
“It looks like we might hit that milestone even earlier,” this year’s report admits.
The report highlighted COVID-19 as a significant challenge for startups all over the world. But, it also suggested the pandemic could slingshot some to success.
More than 50 unicorns were founded during the recession of 2007 to 2009, Martina Larkin, head of regional strategies for Europe and Eurasia, and a member of the executive committee at the World Economic Forum, writes in the report.
And, more than half of Fortune 500 companies were founded during some kind of economic contraction.
The report suggests that crises can also unlock opportunities for whole ecosystems.
“The actions of ecosystems today will help determine how they will be positioned in the global stage tomorrow,” it said.
“Just like the rise of both London and New York City came at the heels of the 2007-2009 Great Recession — in their attempt to diversify from reliance on their traditional strengths in finances — the post-COVID-19 recovery will see new ecosystems rising.”
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