What Is a Decacorn?
A decacorn is a term is used to describe a privately held company with a valuation that exceeds $10 billion. The term is based on the combination of the words “deca” and “unicorn.” Deca means 10, while unicorn refers to a startup valued at $1 billion or more.
The term was coined in 2013 by venture capitalist Aileen Lee, who used the mythical creature as a metaphor for the rarity of such companies. Decacorns are typically young, high-growth companies that have attracted significant investment from venture capitalists. They usually are in industries such as technology and healthcare. Decacorns tend to be valued on their potential for growth, not their financial performance to date. When a decacorn is acquired or goes public, it can no longer be called a decacorn.
- A decacorn is a private company, usually a startup, with a valuation greater than $10 billion.
- Decacorns frequently are new, fast-growing, innovative companies that have attracted significant venture capital investment.
- Decacorns have emerged mostly in the technology and healthcare industries.
- Decacorns often may consider going public through an initial public offering (IPO) or seek other exit opportunities that can lead to good returns for early investors and employees.
- The top 10 decacorns at the time of writing were concentrated mostly in the U.S. and included ByteDance (TikTok’s owner), SpaceX, Stripe, and Fanatics.
Characteristics of a Decacorn
Characteristics of a decacorn may include:
- Valuation: A decacorn has a valuation greater than $10 billion. This indicates that investors perceive significant potential and value in the company.
- Growth: Decacorns typically experience rapid and sustained growth in terms of revenue, user base, market share, or other key performance indicators. They often outpace their competitors and the overall market in which they operate.
- Innovation: These companies are known for introducing disruptive business models, technologies, or products that challenge traditional industries or create markets.
- Positioning: Decacorns establish a dominant position within their industry, often becoming market leaders or key players in their respective sectors.
- Reach: Many decacorns have a global presence, expanding their operations beyond their home markets and targeting customers worldwide.
- Funding sources: Funding for decacorns is often secured from a variety of sources, including renowned venture capital firms, strategic investors, and institutional investors.
- Potential for IPO or exit: Decacorns frequently generate interest from the public markets and may consider going public through an initial public offering (IPO) or seek other exit opportunities, allowing early investors and employees to realize returns.
- Vision: Generally, decacorns typically have a long-term vision and strategic plan to sustain their growth, expand into new markets, and continually innovate to maintain their competitive advantage.
Decacorns are formed through a combination of factors, including exceptional growth, disruptive business models, and investor interest. First, the startup develops a unique and innovative idea, product, or service that has the potential to disrupt an industry or address a significant market need. Then, the company secures initial funding from angel investors, venture capitalists, or other sources to support its early-stager growth and development.
Another key step to a company becoming a decacorn is market traction. The company begins to demonstrate this by acquiring a large customer base, achieving significant revenue growth, and expanding in its market. Next, the company successfully scales its operations through talent development, process efficiency, and leveraging technology to support its growth.
An emerging decacorn raises additional funding through multiple rounds of financing, typically referred to as Series A, B, C, and so on. Each round tends to increase the company’s valuation. Strategic partnerships or collaborations with other organizations provide expertise, resources, or market access to accelerate the decacorn’s growth.
Also, there is continued innovation and disruption for a decacorn. The company maintains its competitive edge by continually improving and staying ahead of market trends, ensuring that it remains an attractive investment opportunity. Finally there are exit opportunities. The company may consider various strategies, such as an IPO, merger, acquisition, or other corporate events that let investors and employees realize returns on their investments.
It should be noted that this is not a “one-size-fits-all” process. Each decacorn has its unique story of reaching a $10 billion valuation. Also, not all startups aspire to become decacorns, as some companies prioritize profitability, sustainability, or other strategic objectives over achieving high valuations.
Unicorn vs. Decacorn vs. Hectocorn
A unicorn is a private company with a valuation at least $1 billion. On the other hand, a decacorn is a private company valued greater than $10 billion; a hectocorn is valued at more than $100 billion. These terms describe the size and growth potential of privately held companies. The main difference among unicorns, decacorns, and hectocorns is their valuations.
Unicorns are the most common type of high-growth company. Decacorns are less common and the larger hectocorns are rare. There are only a handful of hectocorns in the world. All of these types of privately held companies are attractive investment targets for venture capitalists, and they have the potential to generate significant returns for investors.
Top 10 Decacorns
The table below shows the top 10 decacorns as of July 2023.
|Top 10 Decacorns|
|Company||Valuation ($ Bn)||Country||Industry||Select Investors|
|ByteDance||225||China||Technology||Sequoia Capital China, SIG Asia Investments, Sina Weibo, Softbank Group|
|SpaceX||137||U.S.||Industrials||Founders Fund, Draper Fisher Jurvetson, Rothenberg Ventures|
|SHEIN||100||China||Consumer and Retail||Tiger Global Management, Sequoia Capital China, Shunwei Capital Partners|
|Stripe||50||U.S.||Financial Services||Khosla Ventures, LowercaseCapital, capitalG|
|Canva||40||Australia||Enterprise Tech||Sequoia Capital China, Blackbird Ventures, Matrix Partners|
|Revolut||33||U.K.||Financial Services||Index Ventures, DST Global, Ribbit Capital|
|Epic Games||31.50||U.S.||Median & Enterntainment||Tencent Holdings, KKR, Smash Ventures|
|Databricks||31||U.S.||Enterprise Tech||Andreessen Horowitz, New Enterprise Associates, Battery Ventures|
|Fanatics||31||U.S.||Consumer & Retail||Softbank Group, Andreessen Horowitz, Temasek Holdings|
|OpenAI||29||U.S.||Enterprise technology||Khosla Ventures|
Valuation of Decacorns
There were 53 decacorns worldwide in July 2023, with a total valuation of over a trillion dollars. ByteDance is the largest decacorn, with a $225 billion valuation, while the smallest decacorns include Huolala, Wiz, Gusto, Chehaoduo, reddit, Talkdesk, Notion, Thrasio, Digital Currency Group, and KuCoin, each with a valuation of $10 billion as of July 2023.
Geographic Breakdown of Decacorns
From a geographic perspective, decacorns can be found largely in the U.S., China and the U.K. Of the 53 Decacorns in the world, 32 of them are in the U.S., 10 are in China and 4 are in the U.K.
Industry Breakdown of Decacorns
From an industry perspective, decacorns can be found largely in the fintech, internet software & services, and e-commerce & direct-to-consumer industries. Of the 53 decacorns in the world, 15 are in Enterprise Technology, 12 are in Financial Services, another 12 is in Consumer & Retail, 7 are in Media & Entertainment and 2 are in Healthcare & Life Sciences.
How Many Decacorns Are There in the U.S.?
There were 53 decacorns in the U.S. as of July 2023.
What is a Hectocorn?
A hectocorn is a privately held company with a valuation of more than $100 billion. The term is a combination of the Greek words “hecto,” meaning “100,” and “corn,” which is the reference to the mythical unicorn. Hectocorns are extremely rare—there were just two in the world as of July 2023.
What is a Soonicorn?
A “soonicorn” is a privately held company that is about to become a unicorn. That is, the company is about to reach a valuation of more than $1 billion. The term soonicorn is a combination of the words “soon” and “unicorn.”
The Bottom Line
A decacorn is a privately held startup company that has achieved a valuation of more than $10 billion. These companies are characterized by their exceptional growth, disruptive business models, and strong investor interest. Decacorns typically exhibit rapid expansion, strong market traction, and a dominant position within their industry. They often attract top-tier talent and secure funding from renowned venture capital firms and institutional investors.
Decacorns may have a global reach, a long-term vision, and may consider options for going public or other exit strategies. Their valuation distinguishes them as one of the highest-valued types of privately held companies.