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When entering the world of entrepreneurship, after asking the question “What is a startup?” one of the most frequently asked questions is undoubtedly, “What is a unicorn startup?” In short, a unicorn startup can be defined as a startup with a valuation exceeding 1 billion dollars.
In mythology, unicorns symbolize one-horned horses. These horses are extremely rare. The reason why these startups are referred to as unicorns is precisely because of their rarity. Unicorn startups are the unicorns of the business world. They are rarely seen, and it is difficult to claim that they are just ordinary startups that one might come across frequently.
The term “unicorn” was first introduced in this context by investor Aileen Lee in her 2013 article “Welcome to the Unicorn Club: Learning From Million Dollar Startups.” The term later gained widespread recognition and became commonly used in the startup ecosystem. Aileen Lee explained her reasoning for using the term unicorn as follows:
“I used the word ‘unicorn’ because it has a magical feel to it. It seems like a process that requires a bit of time and alchemy. A lot of things need to be done together. This is not easy at all.”
In another interview, Aileen Lee also stated the following about unicorn companies:
“Most venture-backed companies have incredibly smart and well-intentioned people. They develop truly exceptional products, but they never reach unicorn-level valuations. This is a really difficult achievement.”
What are the Characteristics of a Unicorn Startup?
The most defining characteristic of unicorn startups is that they target high-potential and large-scale markets. Since unicorn startups have billion-dollar valuations, targeting such vast markets is a necessity. Therefore, one of the first steps toward achieving unicorn status is conducting thorough market research. Identifying market potential and, if the market is highly competitive, determining the factors that will differentiate the company from others is the most crucial step toward building a unicorn startup.
A prime example of a unicorn startup that targeted a high-potential market is Airbnb. Without a doubt, there were various options for renting homes before Airbnb. However, Airbnb managed to dominate the market through an effective marketing strategy, an intuitive user interface, and robust security measures.
Another example of a unicorn startup that transformed an industry by targeting a high-potential market is Uber. It can even be said that Uber completely revolutionized the transportation sector. By enabling ordinary vehicle owners to become drivers, implementing strict safety checks through reviews, and offering fast and affordable transportation, Uber allowed people to experience quicker and safer rides at prices significantly lower than traditional taxis.
Examples of Unicorn Startups from Around the World
As of 2024, when analyzing the sectoral distribution of unicorn startups, the software industry leads with a total of 831 unicorn companies, followed by the finance sector with 390 companies, and the information technology sector in third place with 339 companies.
Currently, there are more than 1,200 unicorn startups worldwide, with a total estimated valuation exceeding $3.88 billion. Well-known large-scale companies such as Uber, Airbnb, and SpaceX serve as prime examples of unicorn startups on a global scale. Let’s take a brief look at them.
A Unicorn Story that Revolutionized Accommodation: Airbnb
The name Airbnb originates from the popular accommodation concept “bed and breakfast.” The “air” in Airbnb is derived from “air mattress,” and to understand why this term was included in the company’s name, it is essential to take a brief look at Airbnb’s history.
Although Airbnb has a relatively short history, it has completely revolutionized the accommodation sector. The company was founded in 2007 in San Francisco by Joe Gebbia and Brian Chesky. Facing difficulties in paying their rent, Gebbia and Chesky decided to rent out a room in their home, offering guests a temporary stay on an air mattress along with breakfast in the morning.
Airbnb’s rise coincided with the U.S. elections when hotel capacities became insufficient due to election rallies. This situation provided Airbnb’s founders with an opportunity to introduce their platform to the general public. Having transformed the global accommodation landscape, Airbnb has become the dominant player in the short-term lodging industry, with its brand name now being widely recognized and commonly used in everyday language.
The Giant of the Transportation Industry: Uber
Founded in 2009 by Travis Kalanick and Garrett Camp, Uber has become the dominant force in the transportation industry. The idea for Uber was conceived when the two founders were unable to find a taxi on a snowy day in Paris, leading them to create a solution that allowed people to hail a ride through their smartphones.
Uber enabled individuals to travel economically, quickly, and safely to their desired destinations. Today, Uber has regional hubs in major cities such as San Francisco, London, São Paulo, Mexico City, and Amsterdam, and it employs more than 16,000 people worldwide.
Examples of Unicorn Startups from Turkey
Currently, Turkey is home to seven unicorn companies:
- Peak Games
- Getir
- Trendyol
- Hepsiburada
- Insider
- Papara
- Dream Games
Founded in 2010 by Sidar Şahin, Peak Games became the first unicorn startup in Turkey. The company received a total investment of $11.5 million and reached a valuation of $1.8 billion. Recognizing Peak Games’ success, Zynga Games later acquired some of the company’s most successful divisions. Peak Games operates with a team of approximately 100 employees.
Sidar Şahin is also one of the co-founders of Trendyol. Demet Mutlu, the founder of Trendyol, launched the company with an initial capital of just $300,000. Within just 16 months, Trendyol reached a valuation of $16 million. One of the primary reasons behind Trendyol’s success is its results-oriented approach and focus on providing a seamless e-commerce experience for users. Initially starting as a fashion and apparel platform, Trendyol later expanded into grocery delivery and food ordering, entering into direct competition with Getir. With an aggressive growth strategy, Trendyol managed to establish itself as a market leader in these sectors as well.
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