Close
It would be naïve to expect startups to bypass an economic winter. In fact, investment is already dwindling and in some places has dried up altogether. This is good news for businesses reliant on profits for growth, but not-so-good news for those still trying to prove their worth on the market. Rather than sounding the alarm, however, let’s make a rational assessment of what this means for us today and what to expect in the future.
5 most promising industries for unicorns
In 2021, unicorns were showing up on the scene at the breakneck rate of 1.5 a day. The total number of unicorns in the Q2 of this year was 1,118, according to the venture capital fund Open Circle Capital. Even more remarkably, only 6 (or 1%) of unicorns announced terminating their operations last year, while as many as 121 continued to grow, issuing IPOs or being acquired by other market players.
During the last 1.5 years, most (nearly half of all) new unicorns were founded either in the internet software & services or the fintech sector. A breakthrough was also recorded in e-commerce, artificial intelligence, and wellness.
There are currently 171 unicorns in Europe alone, valued collectively at about $535M by the technology market intelligence firm CB Insights. The United Kingdom today has 41 unicorns, Germany – 29, France – 24, and Israel – 21. Even though, compared to global startup trends, European startups are focused more on cybersecurity than AI, every third unicorn in Europe grew up in the fintech sector.
The founders and members of Unicorns Lithuania believe that Lithuania has the potential to become the land of unicorns, but we’ll need both financial investment and patience.
Whence the rebirth of future unicorns?
The looming economic winter is today on everyone’s lips, yet economic fluctuations and business cycles are inevitable. The world’s biggest tech companies have experienced many downturns in the past, and still managed to secure a 6-fold ROI in the past 15 years. With this in mind, it would do us good to regroup and reassess, before the next economic upturn takes us back to the surface.
Unicorns disrupt traditional markets, change habits and create new value propositions. This means that the number of companies operating in the high value- added sector that are capable of developing innovative tech products and having an exceptionally high growth potential will not be going down in the long run.
Speaking of the most promising future markets, apart from the ones relevant right now that we’ve already mentioned, we’d also like to single out data security, digital banking, green energy, e-commerce, fintech, biotech, and deeptech. There’s also a steady demand for SaaS, as evidenced by the grammar plugin Grammarly (developed in Ukraine) being valued today at $13B.
The founders and members of Unicorns Lithuania believe that Lithuania has the potential to become the land of unicorns. Within a single quarter, the number of startups in the country has increased by 4%, reaching a total of 768. Both the number of new jobs created and taxes paid are going up. Lithuania is already triply exceeding the European average in terms of startups per 1M people. Furthermore, our efforts are perfectly in line with global trends – rising stars include SaaS (Hostinger, Whatagraph, Omnisend), fintech (TransferGo), e-commerce solutions (Vinted, Furniture1), wellness (Kilo Health), cybersecurity (Nord Security), and energy (PVcase).
That being said, for Lithuania to become the land of unicorns, we’ll need both financial investment and patience. It takes 7 years on average for a startup to grow into a unicorn, and our first attempts took even longer than that. Nonetheless, given sufficient ambition, we can expect to have our startup ecosystem to at least double by 2025, becoming a major contributor to national economic growth – 2,000 startups, 30,000 sector employees, €375M annual taxes, and no less than 10 unicorns.
