Why There Are So Many "Unicorns" in the Internet Field in 2015?
Source: www.tmtpost.com View: 285 Date: 2015-11-26

Since 2015, one industrial term the most commonly mentioned by the technological media has been the Unicorn, the so-called Unicorn is the Internet Venture Company with its valuation of 1 billion USD, the concept origins from the Silicon Valley of America. And recently, every once in a while, there are related reports saying that, some certain companies make fund-raising of 100 million USD or 2 million USD, which entering the camp of Unicorn companies.

So, Why Are the Unicorn Companies so Many in 2015? And What Do They Mean?

First, the Appearance of Unicorn Companies in Groups in Recent One to Two Years, Firstly Means this Entrepreneurial Tide of Mobile Internet Already Entering the Last Phase.

In fact, since the beginning of 2011, a batch of outstanding mobile Internet companies have been born one by one at domestic, after three to four years' rapid development, the user scale is generally over one hundred millions of people, most of these mobile Internet companies have not been on the market yet, but all these companies have experienced at least three rounds of financing, and the Internet Venture Companies which are capable to reach C Round or D Round have survived like gold washed out of sand, they are basically comparatively excellent companies, and it is normal to be with valuation of over 1 billion USD. For example, TouTiao.com, meilishuo.com, mogujie.com and many more.

And some mobile Internet enterprises even surpass the concept of Unicorn, with valuation of billions of dollars even tens of billions of dollars. For example, xinmeida.com and Kuaidi & Didi.com. It can be said that, after four to five years' hard work, the mobile Internet entrepreneurs have come to the season of harvest. Currently, there are indeed many mobile Internet companies waiting for opportunities to be on the market, and some other mobile Internet enterprises have already been in the plan or waiting in line to be on the New Three Boards.

Second, the Entrepreneurship Turns to Be with Heavy-financing, only by Huge Amount of Financing can the Success Rate of Entrepreneurship Be Ensured

Since 2015, several companies joined in the camp of Unicorn companies are O2O start-up enterprises with relatively heavy financing, for example, edaixi.com and edaijia.com, all these start-up companies have offline teams, and need large scale of promotion subsidies, which means that they are impossible to go too far without huge amount of financing, and only by the power of capital can the competition threshold be rapidly established, in order to face the offensive competitors. This is also decided by the current industrial environment.

At present, for the parts of meeting the online life of people, the Internet giants have completely occupied the market, and the opportunities of start-up companies are from getting through the online and offline vertical services. Once involving the offline, the entrepreneurship turns to be with heavy financing, and needs spending money to expand the scale, so in the field of O2O, it is not fresh news to have valuation of 1 billion USD, xinmeida.com and Kuaidi & Didi.com have reached 20 billion USD. And the fields with much heavier financing, such as the fields of steel B2B, chemical industry B2B, need more capitals to invest, so it is not fresh news to make financing of 100 to 200 million USD, it becomes common practice to enter the camp of Unicorn.

Besides, there are some aspects of intelligent home and intelligent hardware, which are also the start-up fields with heavy financing, and need huge amount of financing to support in the same way.

Third, the Growth Cycle of an Internet Start-up Enterprise Shortens

Compared to the previous fifteen years of the development of Internet, the development speed of mobile Internet in recent five years can be described as being in leaps and bounds.

The industry is changing rapidly, in the world of Internet, there may be a new change every half year. And for the sake of pursuing the future and trend, the investment cycle of venture capital to the start-up Internet companies has been shortened in recent one to two years. And relying on the venture investment, the financing speed of enterprises with rapid growth is very fast, from making financing one time every few years in the past, to make financing one time every few months at present, even many start-up companies prepare to the next round of financing when they just get a new round of financing, on one hand, to give themselves sufficient cash reserve in order to survive in tough time, on the other hand, also to enlarge the valuation scale of enterprises in the process of rapid financing in order to cash out as soon as possible.

Fourth, the Financing Packaging of Enterprises, the Unicorn may be only a Concept.

The concept of Unicorn is generally used when the enterprises expose financing, in fact, this may be just an outward packaging term of financing enterprises, the Unicorn means to enter the club of 1 billion USD, and becomes a star Internet company, the media will be more willing to report, and the enterprises will also get more attention from this.

Perhaps the enterprises utilize the weakness of media and the public of being interested in the star company, many Internet enterprises will probably lie about the amount of financing in order to make themselves look like a company of the camp of Unicorn, but in fact, maybe their valuation doesn't reach 1 billion USD or above, which is not impossible.

In fact, at domestic, maybe it is a pursuit dream of many entrepreneurs to do a Unicorn company with 1 billion USD or above all their lifetime, which also can be said as obsession. Because the Unicorn means rare and precious things, which proves the success of this start-up company in the phase of entrepreneurship, and the enterprise also has had a wide range of popularity in the industry.

Overall, the Unicorn maybe is a simple concept, if it has to be added as a meaning, it is just a small milestone of start-up enterprises, especially in the era of heavy financing, it doesn't mean absolute security for a company of entering the club of 1 billion USD, the potential crisis is always remain.

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