The term ‘unicorn’ is used in the venture capital industry to describe a start-up which has a valuation of over 1 billion dollars. The term was coined by venture capitalist Aileen Lee, the founder of Cowboy Ventures. Back in the 2000s, it was evaluated that only 0.07% of the technology sector venture-backed startups ever reached the 1-billion-dollar valuation. Thus, the name ‘unicorn’ was coined as it means rare and mostly mythical. However, this was before the venture capitalist craze and today the same has changed with more startups reaching the 1-billion-dollar valuation.
The ‘unicorn’ phenomenon is also seen in the human resource department of a company. During the recruitment stage, HR professionals may have expectations from a candidate’s qualification that are higher than required for the job. Rather than facing reality, the HR professionals are looking for a mythical candidate.
The same analogy may be used during a mergers and acquisition transaction. When a market which consists of too many firms as targets, the acquiring firm may latch on unnecessary requirements to be met that may not be in sync with the objectives of the acquiring firm.
In India, the examples of a Unicorn company are Big Basket, Paytm, OYO, Swiggy, and Zomato. India is home to over 26 unicorn companies. Recently, Lenskart got funding of 350 million dollars from SoftBank and is most likely to be the next unicorn.
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