What Does Unicorn Startup Mean?

The definition of a unicorn startup is a privately held company valued at $1 billion or more. Just like the mythical creature, unicorn startups are rare and magical. Many are in software and computer programming, but hardware startups are becoming unicorns too, especially in robotics, clean energy, space technology, and other cutting-edge tech industries. 

The term "unicorn" was coined by venture capitalist Aileen Lee in 2013, when there were only 39 such companies in the world. Today, there are over 1,200 unicorn startup companies globally. These companies aren't just valuable on paper – they're reshaping entire industries and solving big problems with innovative technology.

What's the Difference Between a Startup and a Unicorn?

A startup is any early-stage company built to grow fast and make a big impact. Unlike a traditional small business like a restaurant or retail shop, startups aim to shake up entire markets with new ideas or technology. Unicorns are a type of startup business  – the superstars of the startup world. 

While most startups aim to secure funding and grow steadily, unicorns rocket to that magic $1 billion valuation while still privately owned. However, there is one similarity in the discussion of startup vs. unicorn: Once a company goes public through an IPO (initial public offering), it’s no longer privately owned. That means it can no longer be considered a startup or a unicorn. 

How Unicorn Startups Are Valued

We know that a unicorn startup has achieved a valuation of $1 billion or more. But to really define a unicorn startup, we need to know what valuation means, exactly. In the startup world, valuation represents what investors believe a company will be worth in the future based on its growth potential, not its current revenue or assets.

The valuation process involves analyzing multiple factors including market size, growth rate, competitive advantages, intellectual property, team expertise, and technology innovation. Valuation is assessed at each funding round as the startup grows: Seed funding often values companies between $1 and 5 million, Series A can reach $15 to 30 million, Series B might hit $30 to 60 million, and Series C+ rounds can push valuations into hundreds of millions. Most companies take five to seven years to reach the ​​unicorn startup valuation of $1 billion.

Tips for Becoming a Unicorn Startup

The path to becoming a unicorn startup company isn’t easy. But successful hardware startups do share some strategies that increase their chances of reaching that billion-dollar milestone. 

Solve a Big Problem

Look for problems that affect entire industries or millions of people – the bigger the challenge, the bigger your opportunity to create a business model that attracts investors and drives growth. This could mean reinventing manufacturing processes, creating new energy solutions, or revolutionizing how we interact with machines. When you solve big problems, your market potential grows. That attracts major investors looking for a ​​unicorn startup.

Create a Revolutionary Product

A unicorn startup needs to create breakthrough solutions that transform how things work. Use advanced design and simulation software to test ambitious ideas virtually before investing in physical prototypes. This approach lets you innovate faster and prove your concept to investors with less upfront capital. Cloud-based tools also help you iterate quickly based on feedback and testing.

Build a Power Team

Unicorn hardware technology startups combine technical innovation with business savvy. You need engineers who can solve complex problems, business leaders who understand markets, and industry veterans who know how to scale manufacturing. Focus on building a balanced team that covers product development, operations, sales, and business strategy.

Move at Market Speed

The pace of innovation means a unicorn startup can't spend years developing a product . Stay agile and use digital tools to accelerate your development lifecycle: simulate product performance, test different designs, and validate manufacturing processes virtually. This lets you fail fast, learn quickly, and adapt before the competition.

Think Globally

Investors look for long-term viability in a competitive global market, so design your product and company for worldwide scale from the start. This means creating solutions that work across markets, building flexible supply chains, and developing products you can manufacture efficiently at volume. Global thinking helps you tap into international markets faster and attracts investors looking for the big returns that unicorn startups provide.

Examples of Unicorn Startups

Everyone has heard of headline-grabbing unicorns like Uber and Airbnb. But what is a unicorn company in the hardware space? Here are three examples that show what's possible.

CMR Surgical

This surgical robotics company developed Versius, a next-generation system that makes minimally invasive surgery more accessible and precise. CMR hit unicorn status in 2019 when it raised $240 million in Series C funding that pushed its valuation over $1 billion. In 2023, they raised another $165 million to cement their unicorn status. The funding will help them expand globally and develop new product features. 

Tarana Wireless

Tarana became a unicorn startup in 2022 after raising $170 million, followed by an additional $50 million in recent funding. They've revolutionized fixed wireless broadband with technology that delivers fiber-like speeds without line-of-sight requirements. Their success comes from solving a major technical challenge: providing reliable high-speed internet to areas where fiber installation isn't practical.

Locus Robotics

After becoming a unicorn startup in 2021, Locus Robotics' valuation grew to $2 billion in 2022. Their autonomous mobile robots have completed over 3 billion picks in warehouses worldwide. What drove their meteoric rise? They solved a pressing need in e-commerce fulfillment by creating robots that reduce walking time for warehouse workers while increasing accuracy and productivity.

Launch Your Startup with the Right Tools

Want to join the ranks of hardware unicorn startups? Start by knowing the key steps for creating a startup, building solid processes, and using professional-grade tools that help you work faster and smarter.

Top hardware startups use advanced design and simulation software to test ideas virtually, catch problems early, show investors working prototypes, and get products to market faster. But it can be expensive. 

That's why we created SOLIDWORKS for Startups. Our program gives qualifying startups free access to our professional 3D CAD software. You get enterprise-grade computer-aided design tools, without the enterprise price tag. Learn more about SOLIDWORKS for Startups and join a community of innovators looking to change the world as the next unicorn startup.