Get expert advice on every topic you need as a small business owner, from the ideation stage to your eventual exit. Our articles, quick tips, infographics and how-to guides can offer entrepreneurs the most up-to-date information they need to flourish.

Subscribe to our blog

How dragons dethroned unicorns from the top of the startup valuation heap

Posted by Shivali Anand

February 15, 2022    |     2-minute read (385 words)

CB Insights reports that as of February 2022, there were 1,000 unicorns —privately held startup companies valued at $1 billion or more — around the globe. While reaching unicorn status was once considered the pinnacle of success in the startup milieu, a new term has emerged to describe newcomers with an even-higher valuation: the dragon. 

The unicorn lair

When angel investor Aileen Lee coined the phrase "unicorn" in 2013, she was referring to a then-handful of ultra-profitable enterprises. At that time, only 0.07% or 39 venture-backed enterprises, all of which were headquartered in the U.S., had earned the coveted unicorn valuation of over $1 billion since 2003.

Since then, the definition of a "unicorn startup" has stayed the same, but their count has exploded. While the number of companies valued at $1 billion increased to 80 in 2015, their numbers surpassed 800 by September 2021 and now 1,000 in February 2022.

In the current venture capital investment climate, the uniqueness that Lee's phrase "unicorn" once called out appears to have dissipated.

What is a dragon?

The latest term for the unicorn’s replacement in high-valuation startups is the "dragon," which refers to those businesses with a valuation of at least $12 billion, net of venture capital. As the name implies, dragons are more aggressive businesses, and their ability to raise funds rapidly is astonishing.

For example, in August 2020, Aerospace firm SpaceX secured a staggering $1.9 billion in the most significant investment round for the time, putting it in the dragon club with a post-money valuation of $46 billion. Databricks, an enterprise software company, received a $1.6 billion fundraising round in August 2021, giving it a $38 billion post-money valuation.

While the threshold dragon valuation of $12 billion may appear to be a random number, it indicates a growth rate of more than 10 times that of unicorns, demonstrating the tremendous development of private finance.

According to Crunchbase, at the time of publication there were over 30 worldwide startups that qualify as dragons, with 19 of those U.S.-based.

U.S. dragons as of February 2022, listed in order by valuation starting with the highest:  SpaceX; Stripe; Epic Games; Instacart; Databricks; Chime; Fanatics; Miro; goPuff; Ripple; Plaid; OpenSea; Grammarly; Devoted Health; Faire; Brex; JUUL Labs; Biosplice Therapeutics; and GoodLeap.

Learn how we can put more time back in your day.