For reference, this means the startup will hit the ‘unicorn’ status
It’s often naive to look at a startup’s valuation as a measure of success. After all, there are many stories of startups creating unrealistic ‘fake’ value for their product (e.g., Theranos).
However, looking at all the unicorns in the market, most of them have reached their valuation from finding product-market-fit for their product. Each startup has had a unique way of growing from bootstrapping to VC funding and some even through crowdfunding.
Many of these entrepreneurs never focused on becoming a unicorn but rather solving an actual real-world problem. After all, that shouldn’t be the reason why you become an entrepreneur in the first place.
However, it is exciting to forecast what startups are about to hit this status, especially with all the turmoil that has happened in 2020. It is still a huge achievement for any startup and should still be celebrated. In this list, I look at the five ‘almost’ unicorns that will most likely hit the status in 2021.
A father and son combo fintech, Jeff Cruttendan ran the investment arm of popular trading platform E-trade. Together with his son Walter Cruttendan, he started Acorns in 2012 with a simple idea.
The idea was to round up people’s spare change from debit or credit card purchases and automatically invest them via the application. Investments are automatically made into one to five portfolios, each carrying different levels of risk. Like Robinhood, it is heavily focused on the millennial market, appealing to the younger generation of new investors with easy UI and UX and minimal effort.
As someone who has tried out Acorns (called Raiz in Australia), it’s as simple as it sounds. You pick a portfolio and then link your accounts and let the app do the rest.
As of early 2020, Acorns has had 6.8 million users, up from 4.6 million in 2019. Since 2012, Acorns has had 12 rounds of funding, according to Crunchbase, and has raised over 207 million dollars.
With their last round raised early in 2019 at an 806 million dollar valuation, it won’t be long until Acorns hit the coveted unicorn status either through their own growth or another round raised.
In my opinion, startups that solve a pain point directly at the founder’s heart have a huge advantage over others. You become the customer of your own product and understand the pain others might have as well.
This is the exact case for Eric Kinariala, who spent an hour waiting in a line at a pharmacy for meds before realizing they had already sold out. He started Capsule five years ago with a focus on rebuilding the complex interaction around doctors and pharmacies and building medicine.
The app allows patients to help schedule a delivery within a two-hour window where information is given around the drug as well as an opportunity to speak to a pharmacist via a secure chat. It allows prescribing easier for doctors, especially to help specify alternate drugs if the patient’s insurance doesn’t cover the original selection.
With COVID-19, Capsule went from a nice to have service to something that became essential with all the outbreaks.
“[Capsule] went from something that was a convenience to essential,” — Kinariala said
Today they service more than 60 000 customers in New York (where the problem first originated) and have raised more than $270 million to date. With a revenue of 100 million dollars last year, it will most likely be able to hit the billion-dollar valuation mark by next year.
You visit a website, and you’re looking for something quick.
You notice a search bar on top of the website, and you enter your query, and it delivers your result in real-time.
This is what Algolia does.
For companies like Medium (yes Medium search uses Algolia!), where user experience must be seamless, it helps simplify the search engine capabilities for websites and applications. By providing a set of tools that help make and integrate a full search experience on your sites and applications, it helps deliver a true digital experience.
Since its inception in 2012, it has raised 185.3 million dollars with revenues of 40 million dollars in 2018. If we follow a similar trend with its current YoY growth of 100%, Algolia will have hit at least 100 million dollars of revenue by 2020 and more in 2021.
Even with the raise, Algolia has not disclosed its valuation but looking at revenues and the possibility of another raise in 2021, Algolia is set to reach a billion dollars by next year with relative ease. This is because it’s a SaaS company and one that’s helping empower digital experience.
Both of these segments are lucrative for growth, and my prediction is Algolia will be one of the fastest-growing within this list in the next few years.
I am a huge fan of companies looking to help develop new talent, not just across North America or other English speaking nations but within developing countries.
Andela works to solve the tech-worker shortage in the US by identifying and training software developers in Africa. It especially focuses on countries like Nigeria, Ghana, and Kenya.
Digging a bit deeper into its business model, this startup’s client base compromises of around 200 companies worldwide that pay for these developers that Andela personally selects and trains for the project.
Having raised over 181 million dollars over a period of six years has catapulted this company’s valuation to 700 million dollars since 2019. With another possible round (based on timelines) looking to be raised in 2021, it will most likely also join the unicorn club in due time.
I’ve always been a fan of keeping up with which startups are the next to make their name on the field.
Although the term unicorn should never be used as a reference for success, it does still add weight to a startup's potential
In this article, I wanted to showcase some new exciting startups that will most likely hit the coveted unicorn startups in 2021 and call out some of the awesome things they’re doing.
From health tech to SaaS, we’ve seen how these startups have grown quickly, especially with all of them being less than a decade old.