Spotting the next billion-dollar startup

May 27, 2015

The number of unicorns has shot through the roof recently, with currently more than 100 VC-backed companies valued at $1 billion or more. And it seems there is a new startup joining the list each week.

These companies get a lot of press when they reach the billion-dollar valuation milestone, but spotting them before they get to that point can be a challenge. We sifted through the data in the PitchBook Platform to find patterns shared by current unicorns and came up with several data points that could be used to separate future unicorns from their peers.

Unicorn-2.0- graph 3 (final)Median round amounts for unicorns are much larger than those for non-unicorns, understandably; it’s in the B and C rounds, however, that the amounts begin to significantly differ ($6.5 million and $17 million larger, respectively). We identified the companies that most recently raised a Series B or C round at about the median amounts from the table above and—taking into account several other factors (e.g. investors involved, years since founding)—have compiled a hand-picked list of companies that are prime candidates to be the next unicorns. Note: we excluded some of the more obvious contenders. It’s also worth noting that the candidates at the Series C stage in the table below are specifically on pace to become unicorns in their next financing.

Kyle Unicorn Post Series CKyle Unicorn Post Series BSpotting the next unicorn is not an exact science, but identifying which startups are following directly in the footsteps of their billion-dollar peers is a good place to start. Do you have your own method of determining the next herd of unicorns? Do you agree with our picks? Feel free to chime in below in the comments section.

For an expanded list of unicorn candidates, click here.

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