How we define a “unicorn startup”

| Beauhurst

Unicorn startups – startups which have been valued at over $1 billion – are becoming a more and more common sight. This is especially the case in the US and China, but also in the UK. Incidentally, after the continent economies of the US and China, London’s tech scene is punching well above its weight in this regard.

Indeed, the billion dollar club in the UK is growing quickly, and its members are seen (some would say unwisely) as poster companies for innovation and growth in many economic policy circles. Whether you think they are given too much due or not, it’s important to first define what a unicorn is, allowing us to clearly identify what are (in most cases at least) startup success stories.

What is required for a startup to become a unicorn?

Valuation from investment

Firstly, unicorns need a $1b valuation – no surprises here. The valuation is usually agreed for a funding round, and as such, most visible unicorns are venture backed.


Companies would normally have to announce their valuation to the public in order to be widely recognised as a unicorn. But at Beauhurst, we monitor filings and official documentation made to Companies House, which means we can calculate valuations with high confidence, independently of public announcements.

beauhurst deliveroo EBITDA

Sometimes a startup only receives a $1b valuation when they exit, either through an IPO or an acquisition. We include these startups in our list assuming they were technically valued at $1b or more for a reasonably significant amount of time before the exit event, but no later. As such, we include Just Eat and Zoopla in our list of UK unicorns.


Secondly, a unicorn should generally be independent. This is debatable, but a subsidiary which is set up by Google clearly has an easier route to a billion-dollar valuation than, say, a company founded by university students. In our eyes, this definition also means that a company which has been acquired is no longer a unicorn.


This follows into the much more vague question of what makes a startup a startup, and when an established startup just becomes a normal company. Does age play a factor? Skyscanner was founded in 2001, and reached unicorn status 15 years later with a $125m funding round. Others, such as Deliveroo, reached unicorn status after just five years.

Some sources believe very well-established (older) companies can be counted among the herd. However, we respectfully disagree. Unicorns are named as this status is almost entirely the preserve of equity-funded startups. “Unicorn” status is that of the coveted super-funded young company, a goal for young, hugely fast-growing businesses to be given validation of their growth, almost aside from their revenues and profits, but instead their potential.

For our up to date list of the UK’s startups, see our dedicated unicorn startup information page.

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