From unicorns to dragons, the business world is making it clear that it really loves mythology and folklore! So, what’s a dragon startup?
Unicorn vs. Dragon
Before we get into that, let’s remember what a unicorn is. A unicorn is a private startup valued at over $1 billion. Unicorns are owned by private investors and venture capitalists (VC), these companies also have to be not listed on the stock exchange.
Dragons on the other hand are startups that not only grow quickly but are able to generate a significant return on investment (ROI) for investors. A dragon startup must be valued at $12 billion or more, net of venture funding. It seems random, but it’s not as it reflects more than 10x the growth of unicorns. In other words, a dragon startup is a company that can return an entire fund!
That means that a dragon startup can make enough revenue/profits to pay back investors all the money they invested in a company and still have a little more cash on the side. In case you didn’t catch that, it means that this “dragon” is an incredibly successful company.
So, if an investor made a $10 million investment into a startup and that startup made a profit of $100 million, either by acquisition or going public, then the investors would have returned 10x their investment. That’s why it’s called a dragon. It’s terribly rare, even more so than a unicorn (which is now more common than usual).
Dragon Hunt
Now, where can we find these dragons? Well, there are currently 24 dragons worldwide, and the majority are found in the US such as:
SpaceX: Elon Musk’s aerospace manufacturer and space transportation services company.
Stripe: An online payment processing company.
Airbnb: Our favourite travel app.
Tumblr: The emo-driven social network!
Epic Games: Home to many of our favourite games and Fortnite!
The MENA region also had its first/only dragon for a while. That was TPAY, a direct carrier billing (DCB) provider and the first open mobile payment platform in the MENA region. Then TPAY sold 76% of its shares to Africa’s leading private investment firm Helios Investment Partners.
