As the digitisation of almost all services results in numerous business opportunities, millions of startups mushroom every year. However, only a few of these startups come out with flying colours. Eventually, only some of these attain the status of a ‘unicorn’ with a valuation of over £1 billion. It is estimated that the 33,860 scaleup businesses in the UK contribute £1 trillion to the UK economy on an annual basis, which represents half of the overall SME economy. However, the scaleups are witnessed a shortfall in funding of up to £15 billion this year, due to the COVID-19 crisis that has left an impact on investments.
While some businesses have been worst hit by the pandemic, some others have managed to grow and some closed big funding rounds to fuel their ambitions. As we are approaching the end of 2020, UKTN has come up with a list of stellar UK tech companies that have attained the unicorn status this year. Let’s take a look at how they did that!
Cazoo — fastest ever unicorn
Founder/s: Alex Chesterman
Founded year: 2018
London-based Cazoo, the used car marketplace is one of the leaders in the industry. It is reportedly the fastest ever British unicorn that has attained the status by smashing all records. Going back by a few months, Cazoo raised £240M funding, which took its overall funding to over £450M.
The latest backers of this used car platform include General Catalyst, D1 Capital Partners and funds from Fidelity Management & Research Company and Blackrock. Also, new and existing investors including L Catterton, The Spruce House Partnership, Durable Capital Partners, Novator, Mubadala Capital and DMG Ventures also took part in the funding round. With this funding, Cazoo scored a valuation of £2 billion, this year.
Cazoo makes buying a car quite simple as buying any other product online. Buyers can purchase a used car completely online and get it delivered to their doorsteps in just 72 hours. Also, there’s a 7-day money back guarantee for consumers.
At a time when COVID-19 pandemic crisis still prevails, people are advised to avoid the use of public transportation for their everyday commute. This is where Cazoo’s user car marketplace is disrupting the market segment. The company completed its 10,000th customer delivery just 2 weeks ahead of celebrating its first anniversary since its debut.
Alex Chesterman OBE, Founder & CEO of Cazoo said: “We have an amazing team who are dedicated to reinventing the used car buying experience by providing the best selection, value, quality, and convenience for UK car buyers. Despite the current challenges many businesses are facing, Britain remains a market leader for talent and innovation and a great place to start a business.”
Hopin — now a double unicorn
Founder/s: Johnny Boufarhat
Founded year: 2019
Based out of London, Hopin is a live online events platform that lets attendees learn, connect, and interact with people all over the world. Earlier this month, the virtual event provider bagged $125M (nearly £94.3M) Series B funding in a round led by existing investor IVP. New investors including Tiger Global, Coatu and DFJ Growth also took part in the funding round alongside returning investors Accel, Salesforce Ventures, Seedcamp, and Northzone. With the latest funding round, the overall valuation of the London-based startup escalated to £2B.
Notably, this investment comes a few months after the $40M (nearly £30M) Series A investment it bagged in February. This investment makes Hopin the fastest-ever double unicorn. Now, the company claims to have over 3.5 million users and over 50,000 groups that host events via its software.
It isn’t surprising to see the Zoom rival became a double unicorn in just a year of its launch as the virtual events concept has caught the trend while travel and in-person events were cancelled all over the world.
“Hopin is the fastest-growing company we have seen at this stage and has meaningfully exceeded its plan since our last investment in June,” said Jules Maltz, general partner, IVP. “We have been fortunate to invest in early hyper growth companies like Slack, Snap, and Twitter. Hopin is one of those rare companies with a similar growth trajectory — they have built an extremely customer-centric organization, with an ambitious innovative roadmap that they can scale quickly — a sure recipe for success.
Gymshark — unconventional marketing model
Founder/s: Ben Francis
Founded year: 2012
Gymshark, a sports clothing company based in Solihull is one of the latest British startups to attain the unicorn status. In August this year, the company that has built a brand via social media influencers ranging from YouTube fitness gurus and Instagram bodybuilders raised $200M (nearly £150M) funding from General Athletic. Eventually, its valuation is over $1B (nearly £0.75B) despite its unconventional marketing model.
It is surprising to see the sports clothing brand get the unicorn badge despite the ongoing pandemic crisis, all thanks to its cutting-edge technology that promotes not only working out but also using the right fitness supplements. Gymshark continues its lean approach that rejects the high-street retail model for an entirely online store. While the old-school model is obsessed with having many products in the store, this company believes in the concept of less is more and has only simple products on its online store.
Especially during the COVID-19, many high-street brands all over the world had to close either temporarily or permanently due to accumulating losses in their revenue. On the contrary. Gymshark’s revenue has increased and continues to grow.
Gousto — unicorn after lockdown surge
Founder/s: James Carter, Timo Boldt
Founded year: 2012
Gousto, a London-based online meal-kit manufacturer and retailer is another amazing UK-based company to get the unicorn badge in 2020. The recipe box startup backed by Joe Wicks, a body coach secured £25M equity funding from existing investors BGF and Perwyn taking its valuation over $1M (nearly £0.75B).
Popularly known as the ‘Spotify of food’, Gousto has become a unicorn during the lockdown imposed due to the COVID-19 pandemic. When everyone was stuck at home and millions of people were working from home during the past few months, Gousto has helped them by providing meal kits that are ready to cook or ready eat, thereby saving their valuable time in preparing meals.
Timo Boldt, Founder & CEO of Gousto commented: “Achieving tech unicorn status and joining the ranks of those elite companies that have attained a billion-dollar valuation is a proud moment for the entire Gousto team and all of our shareholders but we are still only just getting started. The market opportunity ahead of us is vast, as changes in consumer behaviour drive permanent change through the entire grocery market.”
Arrival — electric vehicle unicorn
Founder/s: Denis Sverdlov
Founded year: 2015
Arrival is a London-based Tesla rival that develops and manufactures zero-emission, electric public transportation vehicles such as vans and buses. The company recently bagged $660M (nearly £496M) funding. This investment was led by strategic partners Hyundai, Kia, UPS, Winter Capital. Notably, Hyundai and Kia. These partners are looking forward to co-develop zero-emission vehicles along with Arrival.
With this deal, the overall valuation of the company is now $5.4B (nearly £4B). Apart from becoming a unicorn, the company has also claimed that it goes public at the same time. Going by the company’s statement, the Tesla rival is all set to go public in the first quarter of 2021.
Arrival develops software, materials, components, and scalable skateboard platforms and its micro-factories allow them to make vehicles and adapt to any mobility ecosystem. The company’s new method uses low CapEx, rapidly scalable microfactories. These can be placed anywhere in the world in order to serve the regions they are located in.
“With Arrival’s products, our clients are not forced to compromise between being green and being cost-efficient. Our focus on the whole EV ecosystem, new methods of design and production, and our enabling technologies are the key to driving down the cost of EVs and accelerating the transition to zero-emission transportation globally,” said Denis Sverdlov, Founder and CEO of Arrival. “CIIG’s leadership team has invaluable experience in building businesses globally across a wide range of industries. We are excited to partner with them as we begin our journey to being a publicly-listed company and delivering our products to customers and cities around the world.”
Octopus Energy — impact unicorn
Founder/s: Greg Jackson
Founded year: 2015
British utility supplier Octopus Energy achieved the unicorn status in May and is valued at over £1B. This was possible by closing $360M (nearly £270M) funding from Origin Energy, one of Australia’s leading energy companies, which took a 20% stake in Octopus Energy. Notably, this is the one of the biggest funding rounds in the UK this year. Also, it has signed a deal to license the company’s Kraken technology platform. Kraken will bring in over £300M in licencing fees over three years.
In a recent development, the entech pioneer launched its service in Germany in an attempt to disrupt the market and deliver contract freedom and innovative tariff for users. The business named Octopus Energy Germany targets 1 million customers by 2024 and intends to speed up expansion with an investment of €80M (nearly £71.8M).
Greg Jackson, CEO and Founder, Octopus Energy said: “It was a no brainer to set up Octopus Energy in London, surrounded by like-minded tech innovators and game-changing businesses. We’re using technology to make a big green dent in the universe, and from our base in London, we’ve built a further 5 offices across the UK and also have businesses in Australia, Germany and most recently the USA. We’re passionate about making the UK the global ‘Silicon Valley of Energy’, but we would not have been able to grow so quickly domestically or internationally without the support of London’s highly innovative tech ecosystem.”
UK races against the US
Talking about unicorns, almost 48% of the global unicorns are in the US, which is 235 companies including 50% of the global decacorns. Currently, there are 26 decacorns with a valuation of over $10B (nearly £7.5B). Following the US, comes China with the second-highest number of unicorns with 119 (24.3%). Some notably Chinese unicorns include fashion brand SHEIN and ByteDance, which is the world’s only hectocorn valued at over $100B (nearly £75B).
Next comes the UK, which ranks third in terms of the number of unicorns. As per information from Tech Nation, the UK continues to lead Europe in terms of fintech VC investment. In 2020, there has been $2.5B (nearly £1.9B) worth investment in the UK fintech companies so far.