Amid global economic woes, unicorns continue to thrive

Despite the lingering COVID-19 pandemic and increasing talk of a global recession, the number of so-called unicorns worldwide continues to rise.

In 2022 so far, 239 new unicorns, a moniker for venture capital-backed companies valued at $1 billion or more, have emerged, according to the market research firm Pitchbook. This year’s growth is on pace with 2021, which saw a record 588 companies earn unicorn status—more than the previous four years combined.

The term unicorn was first coined in 2013 by Aileen Lee, a longtime venture capitalist who published an article in TechCrunch about the burgeoning club of billion-dollar startup companies. It was quickly popularized by venture capitalists, first in Silicon Valley and then across the global technology startup sector.

This year, new unicorns have popped up across the world. Regionally, North America tops the list with 146 new unicorns so far, according to Pitchbook. Europe, Asia and Latin America follow with 42, 40 and 6 new unicorns, respectively.

While still rare and extraordinary—hence the venture capitalist world’s mythical epithet—unicorns are becoming increasingly common. Last year, Pitchbook reported that roughly 8% of companies globally that received venture capital investment were valued at $1 billion or more. Today, there are over 1,200 unicorns worldwide, according to the firm.

The continued growth comes amid ongoing economic gloom stemming from compounding crises. “The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth," David Malpass, the president of the World Bank, stated in the group's June 2022 Global Economic Prospects report. "For many countries, recession will be hard to avoid.”

Meanwhile, governments across the world continue to hike interest rates and pursue monetary tightening strategies.

The level of global venture capital funding has also dipped recently following a peak monthly high of $70 billion in November 2021, according to Crunchbase. In May 2022, funding hit $39 billion. Still, experts note that venture capital investments remain strong overall and will likely fuel the birth of more new unicorns.