Japanese media: Global unicorn companies double in two years, accounting for 70% in China and the US

The number of large start-ups, known as "unicorns", has risen to 500 globally, the Nikkei reported on November 27. Unicorns have doubled in about two years, thanks to the convergence of existing industries and information technology and advances in artificial intelligence.

Unicorns are start-ups valued at more than $1 billion, according to the report. A cybersecurity countermeasures company with offices in Israel, the United States and elsewhere was valued at $1.3 billion Tuesday, making it the 500th unicorn, according to CB Ventures, a U.S. data think tank.

It took more than four years to grow to 250 unicorns, and about two years to double from 250, according to CB Ventures. The reason is that institutional investors have increased their investment in start-ups that promise high returns as they become more attractive.

The report notes that 89 companies have become unicorns despite concerns that the COVID-19 epidemic will worsen the financing environment for start-ups in 2020. Because of coVID-19, demand for e-commerce and health care has increased, and these sectors account for a higher proportion of unicorns.

The report noted that among the 500 unicorns by country and region, U.S. companies accounted for the most, followed by Chinese companies. American and Chinese companies together account for 70 per cent. Japan has four companies on the list, ranking 11th.

For a start-up to become a unicorn, the report said, it would need to raise large amounts of capital from venture capital funds. But the bar for late-growth Japanese start-ups is high, forcing them to rely on initial public offerings. This is one reason why there are fewer unicorns in Japan.