Uber and Airbnb were part of an early generation of tech start-ups that quickly reached $1 billion in value. The up-and-coming generation is looking very different.
SAN FRANCISCO — Technology start-ups worth $1 billion, once as rare as unicorns, are now plentiful enough and old enough that there’s a new generation behind them — one that looks very different.
Silicon Valley’s current crop of highly valued tech start-ups, which include now-household names like Uber and Airbnb, all benefited from the spread of smartphones and cheap cloud computing. Many of these companies built global empires by simply taking existing businesses — like taxis, food delivery and hotels — and making them mobile. Some of the start-ups became giants: Uber, for instance, may reach a $120 billion valuation this year.
But as those companies have matured and prepare to go public, the easy opportunities for disrupting old-line industries are drying up. Now, many of the up-and-coming start-ups that may become the next unicorns have names like Benchling and Blend. And they largely focus on software for specific industries like farms, banks and life sciences companies.
That’s according to an analysis for The New York Times by CB Insights, a firm that tracks venture capital and start-ups. CB Insights used a variety of data — including financial health and the strength and size of the market a company serves — to identify 50 start-ups that may be on a path to achieving a $1 billion valuation (though there is no guarantee they will get there).
Software start-ups may seem boring. But many of them are growing fast because industries like agriculture require more software tools as they adapt to the tech era, said Jason Green, an investor at Emergence, a venture capital firm that invests in cloud software companies.
[A list of 50 start-ups that may be the next billion-dollar unicorns.]
“Maybe it’s not as sexy as the companies in the first wave,” said Kirsten Green, a venture capitalist at Forerunner Ventures. “A lot of those industries are big giant industries that we need in our lives and in business, and they need to be modernized.”
Other potential unicorns, such as Checkr and Earnin, are building businesses off the last generation of unicorns by offering services to them. CB Insights also pinpointed three start-ups that are popular with millennial women — Glossier, Zola and Faire — as unicorn candidates.
Some of these companies may reach the $1 billion threshold quickly, as unicorn start-ups are created more quickly than ever, said Anand Sanwal, chief executive of CB Insights. Funding rounds of $100 million or more — a once eye-popping sum of capital — have become common. Today, there are 315 unicorns, compared with 131 in 2015.
“If you are one of those high-momentum companies, investors are going to be beating down your door because there is so much interest in investing in the next big winner,” Mr.
