The Fairy Tale of Unicorns




startup, unicorn, diffusion, forecasting, Logistic model, Gompertz model


Unicorns have become symbols of entrepreneurial success and innovation-friendly’ countries. Therefore, understanding the process of diffusion of these highly valued startups has important implications for business, investors and policymakers. However, the existing literature lacks a description of the diffusion and forecast of these types of ventures. We address this gap by analyzing the diffusion process of unicorns in 8 countries (USA, China, India, UK, Germany, France, Netherlands, and Sweden) and 3 industries (Fintech, Health, and Transportation) using both 3-parameters and 4-parameters Gompertz and Logistic models. Our diffusion analyses reveal that the Gompertz model is suited for analyzing unicorn diffusion in China, whereas the Logistic model is appropriate for analyzing unicorn diffusion in the rest of the countries studied. We also find that India has the highest estimated speed of diffusion (97%) while the USA has the highest saturation level of unicorns (6241). Our forecasting analyses indicate that all the countries selected in our study, except the USA, will achieve their saturation level of unicorn diffusion around 2030. Further, results regarding unicorn diffusion by sectors show that the Logistic model is suited for analyzing unicorn diffusion in all the sectors studied. Results of forecasting analyses indicate that while the Transportation and Health sectors are expected to achieve the maximum level of unicorn diffusion in 2030, the Fintech sector need ten years more to reach this level. These findings are useful for planning, regulation, policy formulation, and portfolio decision.