Last week, TechCrunch published an article on what author and founder of seed-stage fund Cowboy Ventures Aileen Lee called, “The Unicorn Club” – the term coined for the 39 “U.S.-based software companies started since 2003 and valued at over $1 billion by public or private market investors.”
The somewhat silly horned horse moniker toys with the idea that a young company breaking into the upper tier and earning lofty revenues is as rare as, well, spotting one of those glittering, mythical beings.
These mega hit companies, most of which fall within the e-commerce, consumer audience, software-as-a-service and enterprise software spaces, comprise a minute .07 percent of venture-backed consumer and enterprise software startups.
Meaning that, of the 60,000 software and Internet startups to receive funding in past decade, only .07 percent have become “unicorns,” according to firm's findings.
Or, in other words: Building the next winning company is more than 100 times harder than getting into Harvard.
It’s not astonishing that more unicorns exist on the West Coast, peppered around San Francisco and the Valley. A couple of companies – like RetailMeNot and HomeAway – fall in Austin. But what about the other side of the country? We took a look at the list of so-called unicorns to see which companies had roots or offices on the East Coast and within the greater Boston area.
For starters, Facebook, the “super-unicorn” of our decade — defined by a worth of over $100 billion — was born out of Boston back when the social network’s famous founder was a student at Harvard. (Having been accepted into the Ivy League school and creating a killer company, perhaps Zuck is the ultimate unicorn among the bunch.) Facebook accounts for almost half of the $260 billion aggregate value of the selected companies.
Founded in Connecticut in 2004, KAYAK keeps shop closer to the Atlantic shoreline. The travel search engine also has its technology headquarters in Concord. The company was, of course, acquired by Priceline in 2012 for $1.8 billion.
Twitter, which bought up three Boston startups – Bluefin Labs, Spindle and Crashlytics – this past summer, was fourth on the unicorn cut list — its worth rumored to be pegged between $9 and $10 million. The company picked the Hub over New York for its East Coast office just this year. We’ll be watching to see what happens to the company post-IPO.
Boston has a troublesome history with Californian social media gaming company Zynga. After acquiring Conduit Labs in 2010, Zynga opened a branch in Cambridge. Months later in 2012, the company laid off five percent of its overall staff and closed its East Coast office for good. The company also closed its Baltimore office in February of 2013, and consolidated into an office in NYC.
Other unicorns on the list that host Boston offices are: Workday, Uber (also in NYC and Washington D.C.) and Gilt (also headquartered NYC).
Companies holding space on the East Coast include: Palantir (NYC & Washington D.C. area), FireEye (D.C.), Square (NYC), Tumblr (headquartered in NYC) and Fab.com (headquartered in NYC).
All in all, the East Coast is home to 12 out of 39 of the country's companies valued at over $1 billion.
Which Boston companies will make up the next decade's Unicorn Club? Let us know in the comments below.
