Unicorns are becoming less rare globally and in Africa too
Africa now has five tech companies valued at over $1B, not including the "hidden unicorns." Here's a look at who they are and who's next up.
Afridigest provides ideas & analysis for startup founders, operators, and investors across Africa and beyond.
This essay explores Africa’s most valuable tech companies — those confirmed & those next up. It also takes a quick look at the hidden unicorns that often go unmentioned.
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In the 2013 Techcrunch article ‘Welcome To The Unicorn Club: Learning From Billion-Dollar Startups,’ Aileen Lee, then a year into her role as a founder and managing partner of Cowboy Ventures (after more than a decade as a Kleiner Perkins partner), coined the term “unicorn” to describe startups less than 10 years old and valued at $1B or more by private investors (i.e. VCs & strategic investors), acquirers, or public markets.
“So, we wondered, as we’re a year into our new fund … how likely is it for a startup to achieve a billion-dollar valuation? … To answer these questions, the Cowboy Ventures team built a dataset of U.S.-based tech companies started since January 2003 and most recently valued at $1 billion by private or public markets… Here is a summary of what we’ve learned…about the ‘Unicorn Club.’” — Aileen Lee, Founder, Cowboy Ventures
Finding just 39 such companies in the US at the time, with an average of four new unicorns born per year over the previous decade, she added the following footnote: “Yes we know the term ‘unicorn’ is not perfect – unicorns apparently don’t exist, and these companies do — but we like the term because to us, it means something extremely rare, and magical.”
These days, the term ‘unicorn’ has been refined to refer in common parlance to privately-held startups worth $1B or more, irrespective of their founding date. And they have become significantly less rare.
The explosion of unicorns globally in 2021
According to data from CB Insights, there are currently over 800 unicorns globally, worth a combined ~$2.6 trillion. And, to quote from The Economist, they are “multiplying at a clip that is more rabbit-like,” with more new unicorns birthed in the first half of this year than in all of 2020 and 2019 combined.
Notably, three out of four of the world’s ~800 unicorns today come from the US, China, or India.
However, across Africa, companies worth $1B or more are becoming less of a rarity as well.
The rise of African unicorns
With OPay's $400M Series C earlier this week, a new unicorn was born in Africa, and the continent now has 3 confirmed private unicorns & 5 tech companies valued at over $1 billion, excluding telco mobile money subsidiaries.
Next up are likely: