ByteDance, the parent company of video-sharing app TikTok, has been one of China’s most successful ‘unicorns’, but how many more such companies is the country likely to produce? (Photo by Greg Baker/AFP via Getty Images)

A unicorn is a privately owned start-up company with a valuation of more than $1bn. According to CB Insights, there are – as of June 2021 – 710 unicorns in the world, with a total cumulative valuation of approximately $2.3trn. Most of these unicorns are in technology subsectors such as fintech, software, AI and e-commerce.

In foreign direct investment (FDI) terms, a unicorn is a great example of a company that is proving a solid business idea and has the potential to expand rapidly. Investment promotion agencies should look to build relationships at the earliest stage as unicorns have the potential to expand and look to new markets. This would inevitably create jobs and investment – key metrics of an agency’s performance.

Corporates should also be aware of existing and potential unicorns as they could be an investor in the company, acquire the company if it sits well within their business remit, add to their competitor list, identify potential areas for learning, and/or build business relationships as a buyer or seller.

GlobalData has devised an algorithm to predict potential unicorns. A potential unicorn is a company that could achieve unicorn status. As of April 2021, a total of 2,816 potential unicorns were identified.

The US is predicted to remain the nucleus for new unicorns

The US is expected to remain the dominant source market for new unicorns. The analysis shows that more than half (57.5%) of those companies identified as potential unicorns are headquartered in the US. High levels of innovation, a large domestic market to source high-quality talent and the ability to sell to a large domestic market are key factors behind the US’s continued conveyor belt of unicorn production. The US is also already home to some of the largest companies in the world, particularly in technology, financial and health-related areas.

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In general, the top ten countries by number of potential unicorns are largely the same as the existing list of current unicorns. Singapore and Sweden would be the only countries that would, theoretically, jump into the top ten, at the expense of Brazil and South Korea.

India and the UK have the potential to create more unicorns than China. UK-based unicorns would be expected to materialise from London, while in India, Bangalore, Gurugram and Mumbai are expected to be the locations to watch. Chinese unicorns are highly concentrated in Beijing and Shanghai; however, a secondary tier of locations that takes in the likes of Shenzhen and Hangzhou is emerging.


Big tech cities are key for new unicorns

San Francisco (255) and New York (212) have the highest number of potential unicorns; 14 of the top 25 cities were US-based. Notable non-US cities include London, which ranks third with 152 potential unicorns, Bangalore (82), Berlin (58) and Beijing (56). The top cities boast large, developed markets and are tech and R&D focused.

The global spread of potential unicorns is limited. There appears to be little potential in Latin America, the Middle East and Africa. Many countries within these regions, particularly Latin America and Africa, are poorer nations. Companies may lack the technological capacity – important as many unicorns and potential unicorns are tech-related companies – to develop new ideas and/or to scale up quickly. They may also be much further from a network of peers that can either help build capabilities (via venture capital) or encourage them through competition. Silicon Valley in the US is a perfect example of how networks and clusters can produce unicorns. Governments in the regions could encourage companies to pursue new, innovative ideas via subsidies, grants or tax breaks among other measures.

US producing unicorns on both coasts

California’s Silicon Valley is notorious as a start-up cluster and has been the birthplace of many of the largest companies operating today, including Google, Facebook and Netflix. It is no surprise that California is predicted to continue its reign as the largest producer of unicorns. According to GlobalData, 665 new unicorns could be derived from the Golden State. The high quality of education and cooperation helps to drive the entrepreneurial environment in the state. On the east coast, New York (235 potential unicorns) and Massachusetts (140) are predicted to be the next largest hubs.

Tech sector is key for unicorns

More than half (57%) of the potential unicorns identified are primarily focused in the technology and communications sector. Most existing unicorns are also tech-based. Technology subsectors such as AI, fintech and big data are creating unicorns due to large demand from all industries to have more data, more quickly and with fewer resources. These tech subsectors will almost certainly create more unicorns in the future. Additional technology areas that are in their infancy, such as quantum computing, are also expected to create unicorns – assuming these companies are not gobbled up by market leaders – as the concept is potentially game-changing.

Companies in business, financial and professional services (BFPS) and life science sectors may also flourish. These sectors are also significant FDI sectors, demonstrating the synergies between unicorns and FDI. By project numbers, technology, BFPS and life science sectors are the top three FDI sectors. Locations that tick the FDI checklist (excellent business environment, high-quality talent, highly connected, and so on) are also likely to be a nest for unicorns. Top FDI destination markets are also top source markets.

Ten potential unicorns

The table below shows a selection of potential unicorns. Each company is active across a range of sectors; however, note the heavy reliance on technology.


GlobalData seeks to identify at the earliest possible time whether a venture capital-funded company has the potential to achieve unicorn valuation (a valuation of at least $1bn). Companies are assessed up to the first four funding rounds, with deal values, average deal value per investor and number of top investors factored into the algorithm. In total, more than 56,000 companies are assessed. Data is updated in real time, when new deals occur. For further information or to purchase the full list please, contact GlobalData.