The high potential of the tech industry has led to the growth of ‘tech unicorns’ which are companies that have been valued at more than $1 billion by investors. Their game changing innovations have caught the eye of many investors. Tech unicorns specialise in different things like payments, technology, businesses, fintech, etc.
An exciting thing is that as of February 2022, there are around 1,000 unicorns globally. Many factors are responsible for the success of start-ups, such as social media, customers, global and rapid expansion. Globally, countries and continents perform differently.
The Covid-19 pandemic affected many businesses, resulting in the closure of some. However, start-up companies in central and eastern Europe remained resilient. This region has seen the birth of 34 unicorns so far, attracting more investors to the region. Among the top three countries are Poland, which has eight unicorns, Estonia with six, and the Czech Republic with four. The Baltic region is well-known for the success of tech unicorns like Bolt, Skype, and Vinted.
These start-ups have made leaps globally. ‘UiPath’, which originated from Romania, is one of the most prominent and successful start-ups. Poland also has ‘InPost’, targeting central eastern Europe and the UK, and ‘CD Projekt RED’, through which it has reported the rise of the most successful gaming companies. These nations have thrived well due to the capabilities of their IT experts.
The UK tech sector is third in the world, behind the US and China. Last year, the UK created one unicorn per month, creating 13 new tech unicorns in total, bringing the overall number to 72. London is the centre of Europe’s tech, producing 21 percent of the continent’s fast-growing unicorns. Examples of tech unicorns in the UK are Checkout.com, Revolut, and Global Switch.
The US, which comes first in tech unicorns, has many investors together with Latin American investors that are helping most Latin Americans for the past many years. Twenthy-three Latin American companies have recorded $1 billion, according to CrunchBase data. Fintech was able to represent 40 percent of the overall regional capital invested. Mexico’s Kavak, an online platform that offers insight into buying pre-owned cars, is also doing well.
Asia, especially China, is also doing great in tech unicorns. According to Joonpyo Lee, the chief executive of Softbank Ventures Asia, the emergence of more capital will help many start-ups in southern Asia go beyond Asia to global markets. This is due to things like China’s crackdown on giant tech firms, which is making investors assess the risks involved in Chinese companies. Also, there are geopolitical tensions between India and China, making tech unicorns in China shift from India to Southeast Asia. Despite these factors, young talented people have seen the future and are now focusing on start-ups. Also, regional and international investors are willing to fund new companies.
This has opened doors for Pakistani unicorns. Many people have left their companies to either start or join start-ups. Pakistan also has a lot of potential because considerable technical talents are growing based on software development. Incubators and accelerators, which are about 35, help people start their businesses.
An excellent example of Pakistan’s tech unicorns are Afiniti and Careem. Careem is a taxi app. Afiniti was founded by a Pakistani-American entrepreneur in the Silicon Valley and, through technology, is making many ‘smile’ as it helps in the straightening of teeth by the use of 3D computer imaging. Pakistan is doing well as it is starting to demonstrate technology for the future.
Tech unicorns are going to bring a lot of change to the world as they have more exciting impacts. The first thing is that tech unicorns will digitalise consumer financial services. This is because economic growth has seen the need to digitalise payments. Many digital banking unicorns have risen from two in 2016 to 18 in 2021. Wealthtech has the same increase from four to 22. Fintech has been increased from 36 to 159, which is an incredible rise. Diversity has made the world a global village.
Another importance of tech unicorns to the world is that there will be energy transformation. Electric vehicle markets are expanding significantly, and many automakers are offering electric models and electric transition. Electric vehicle charging networks are growing globally, especially in China, due to an increase in the number of electric vehicle charging stations. Also, tech unicorns are changing mobility companies, especially during the pandemic.
Another importance is that ‘healthcare’ has gone partially virtual. The pandemic had overwhelmed hospitals across the globe, making it difficult for someone with minor health issues to see a doctor. Telehealth and telemedicine services helped significantly. Since the pandemic started, 13 telehealth unicorns dominated the healthcare field, and this number shows that at least nine companies became unicorns by the first six months of 2021.
Pakistan, on the other hand, will also benefit from tech unicorns. The first thing is that it will create a demographic dividend for the coming years because young people will join the workforce, bringing productivity and improving the economy. Another importance is that people from the middle-class will create a multi-billion-dollar market due to urbanisation.
The middle class has made a consumer-led spending boom that has grown over time, leading to the emergence of markets. If the government invests more in technology, tech unicorns will increase significantly. Also, new trends are coming up that people should positively embrace.
Tech unicorns are emerging even in countries like Pakistan, which has shown a positive trend, and their impacts are also encouraging. The best performing countries have demonstrated that economic size is one of the essential factors for the growth of a tech unicorn and for attracting potential investors. Tech unicorns will make most things automated. When this becomes possible, people will find that their time is being saved, operation costs are being monitored more efficiently, and things are flowing in the desired manner.
The writer is CTO & director, Centre of Information Technology at IoBM.
He tweets @imranbatada and can be reached at: Imran.firstname.lastname@example.org