Have unicorns startups become present day versions of IBM, GE, Bell Labs, GM and Walmart on steroids?
In the days of old (pre-Amazon circa 1994), for these giants of industry, emphasis was on the bottom line and steady growth over many, many years. This strategy is in stark contrast to today’s movers and shakers where value is measured in market share, how fast can you get it and how big your next round will be.
Last year in a Forbes article, Roman Stanek, Founder and CEO at GoodData, pointed out that a study conducted last year by DeLoitte stated, “The study’s results seemed to be presented in a manner that suggests large organizations should try to avoid being disrupted, when in reality, all companies — Fortune 250 or not — should be figuring out how to become the kind of company that disrupts the market. In other words, the message shouldn’t be ‘how to avoid becoming Blockbuster,’ it should be ‘how to become Netflix.’ “
Innovation. Agility. Bureaucracy avoiders. In today’s world of accelerating market forces and increasing environmental complexity, companies have to employ these key components if they want to compete and succeed. It’s king of the mountain redefined for the 21st century.
The Prime Unicorn Index (Index) is filled with companies that exemplify this disruptive environment. These companies are building organizations that are creating a different order out of the chaos. Order based on massive amounts of data that seem at everyone’s fingertips, but in reality, translating this data into something the market can consume requires the best innovators and critical thinkers, en masse, the business world has ever seen.
Along with industry disruption, these companies have also upended the financial valuation model as start-up unicorn valuations have skyrocketed in recent years because of the slowdown in IPO’s, therell an enormous amount of venture capital that need to find investment opportunities.
As of February 21, 2019, Lagniappe Labs reported that the 116 companies listed on the Prime Unicorn Index had a total valuation of over $377 billion. The top three industries producing unicorns and near unicorns are Software/IT Services (50.86%), Consumer Products and Services (13.79%) and Financial Services (11.21%).
These titans of disruption have created some of the most valuable companies in the world. Within these categories and others, well-known companies Lyft, Uber, Bird, Lime, Airbnb, WeWork, SpaceX, JUUL and Coinbase are disruptive forces in the transportation, hospitality, commercial real estate, space exploration, tobacco and financial sectors, respectively.
And though not yet household names per se, but still significant players, are Maplebear (DBA Instacart) and DoorDash as they change how groceries and goods for small businesses are delivered. And the list goes on.
There’s SoFi, a financial services company changing how loans, refinancing and wealth is managed. Plaid for banking. Compass and Opendoor for residential real estate. Rubrik and Databricks in the cloud data industry. Just to name a few.
The Index provides a unique opportunity for institutional investors to access a fair representation of the private markets that play host to these disruptive and innovative companies. They can invest in the future of their portfolios, whether they want to go long or short.
In addition, the Index provides up-to-date empirical data used to track today’s private capital markets and offer ways to offset exposure in regard to direct private market investments by taking advantage of the trading opportunities presented by Prime Unicorn Index.
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