Even unicorns grow up — at least, the lucky ones. More than 1,500 private companies have the $1bn-plus valuation that merits that label, first coined by venture capitalist Aileen Lee in 2013, according to data from Crunchbase. OpenAI is one that has outgrown the stable. But it is tougher these days to go from horned foal to winged steed — and what that takes, or who, is in dispute.
Cheap money and boosterism made it easier for founders to hit the fabled milestone. But among US companies founded in the past 20 years, only Meta and Uber have transitioned to what consultancy Bain & Company calls a “scale insurgent”, with $10bn in annual revenue and $1bn of operating cash flow. By contrast, the 1990-2003 vintage produced six such insurgents, including Tesla, Amazon.com and Alphabet.
Despite the seemingly lower chances of achieving greatness, money pours in. Today’s unicorns have raised $1tn in total — more than one-quarter of which was deployed in 2021, when US interest rates were essentially zero. After notching up a $157bn valuation this week, OpenAI is one of the biggest, behind TikTok owner ByteDance and Elon Musk’s SpaceX.