What will be the next startup unicorns?

What is a unicorn and what makes it so special?

A startup must meet two requirements to be considered a unicorn: first, it must be valued at a minimum of one billion U.S. dollars or euros and second, it must not be listed on the stock exchange when it is valued.

A unicorn is a mythical beast, so the name began to be used because startup unicorns are both extremely rare and highly sought-after by potential investors. Today, there are more than 1,200 of these startups around the world. Although there were only 36 German unicorns on this list at the end of 2022, the figure is now rising fast.

What is the difference between a unicorn and a soonicorn?

Unicorns have already broken through the one billion valuation, while some new startups are still building up to that mark. The ones that are likely to be just a few months or years away from being considered unicorns are known as soonicorns – a blend of “soon” and “unicorn”.

How the startup market is currently progressing

Right now, the volatile global economic situation and the ensuing change in behavior of venture capital companies mean that things are shifting when it comes to the financing of startups and thus the formation of new unicorns. Even once the industry is back on a more stable footing, it’s clear that funding will no longer be as readily available as it was just a few years ago – even in the United States. Investors and startup experts are predicting the following three situations:

1. Startup financing will become significantly smaller in scale: convertible loans (loans that are repaid by transferring shares in the business) will increase, as will bridge rounds as a way of bridging the gaps between larger financing rounds.
2. Rising interest rates will mean that startups are likely to find it difficult to procure private equity.
3. The concentration of funding on fewer businesses will lead to an increase in the quality of startups, since only the very best ones will be able to secure the required financing if investors are more tentative.

On your mark – ten businesses with the potential to become unicorn startups

The startup landscape is highly competitive and pits the best ideas and business models against each other, with financing as the prize. We have identified ten primarily German companies that have the potential to achieve unicorn status in the next one to two years:

#1 Aleph Alpha: Competitive AI from Germany

Sector: Artificial intelligence

Startup Aleph Alpha is potentially galloping toward the unicorn herd with its mission of developing AI for the public and private sectors. The company’s stated aim is to reinforce Europe’s sovereignty and expand Europe’s position on the international stage. In line with this, its AI technology, Luminous – which processes images and text – specializes in European languages and cultures. Aleph Alpha has also established the most powerful commercial AI computing cluster in Europe, near the city of Bayreuth.

#2 ShowHeroes: Using video content to deliver success

Sector: Publishing and advertising

ShowHeroes offers an effective wide range of solutions and formats for publishers and advertisers, including digital video content, technologies, and advertising solutions. As a result, the company is already one of the industry’s leading service providers. The portfolio of this potential unicorn startup also includes a video licensing and monetization platform.

#3 CoachHub: Coaching for everyone

Sector: Coaching

CoachHub is a global market leader for digital coaching that is already on the way to becoming a unicorn startup. With more than 3,500 professional business coaches and an AI-supported platform, the company’s mission is to use a scientific approach to take personal employee development to a new level. CoachHub has significant potential because we are living in a time when lifelong learning is continually gaining in importance.

#4 PlanRadar: Digitalization in the construction industry

Sector: Construction and real estate

PlanRadar aims to use an innovative tool to digitalize the information processes and workflows in companies in the construction and real estate industry. It appears to have spotted a gap in the market with this mission, since it is firmly on course to become a new Austrian startup unicorn. PlanRadar’s platform enables companies to manage their documentation, communication, tasks, and errors in one centralized location.

#5 Spryker: Emerging platform for digital commerce

Sector: Digital commerce

With its platform-as-a-service offering and a cloud-based strategy, Spryker is on the point of riding the wave of success, thanks to flexible and agile digital commerce solutions that are utilized by companies worldwide. The innovative startup operates one single platform that meets the needs of a range of business models, from B2B and B2C through to unified commerce and enterprise marketplace.

#6 Productsup: Companies love the user-friendly dashboard

Sector: Product information management

Productsup is a startup focused on helping companies manage the global value creation chain for their product information more efficiently. It does this by extracting the product information from more than 2,500 marketing and retail channels and bringing it together on one single platform. The startup is impressing customers and investors with its ability to bring clarity to the data jungle.

#7 InstaFreight: Optimizing freight transport processes

Sector: Logistics

InstaFreight develops digital transport services, enabling companies to optimize the reliability of their freight transport as well as the processes used for it. Customers of the startup enjoy increased efficiency, which in turn reduces their costs. This is clearly well-received by the market, as InstaFreight is growing rapidly and could soon become a startup unicorn.

#8 Flip: Digital communication with a mobile workforce

Sector: Communications

Flip means that deskless employees can finally participate in their company’s internal digital communications. The startup has developed a digital platform that aims to replace the bulletin board as a channel for communicating with operational staff in companies. This practical app has already won over well-known customers, meaning that Flip is also on the radar of renowned financiers.

#9 Stryze: Berlin-based D2C expertise

Sector: D2C marketing and sales

Stryze is an aspiring startup that helps D2C brands achieve success. It applies one of two strategies: either acquiring the brand and then developing it further, or using channels including Amazon and social media to develop and market a D2C brand. Stryze also offers customized brand development packages to public figures and influencers.

#10 Urban Sports Club: a fresh take on fitness

Sector: Fitness and wellness

Urban Sports Club is reimagining fitness and wellness – and doing it very successfully. Just one membership allows the company’s private clients to access a wide range of sports and relaxation options. This business model is proving to be extremely popular with plenty of amateur athletes – and attracting investors as a result.

German and European startup unicorns are gaining momentum

This listicle shows just a selection of soonicorns; these companies embody the fast-growing scene in Germany and Europe, which is producing more and more startup unicorns. This market is actually growing faster than the United States, which is seen as the home of startups. Young companies and committed founders are facing exciting times – in a positive sense – even though the global economy and thus investor behavior is changing.