Tesla. Grab. Robinhood. GoJek. Unicorns past and present have captivated investor interest over the past decade and helped drive the rapid growth of private equity as an asset class.
Between 2010 and 2020, for example, global assets under management (“AUM”) in the private markets grew by US$4 trillion - an increase of 170%. By the end of 2019, total AUM across markets hit an all-time high at US$6.5 trillion, according to McKinsey. Over that same period, private equity returned 13.2% per year compared to 6.6% in public equities and 4.2% in fixed income securities, according to research by Cambridge Associates and selected benchmarks. To put this in perspective, the implied compounded returns of private equity over the last 10-year period was 246% versus 89% for public equity.
Much of this growth is at least partially attributable to the rise of unicorn companies - privately held startups reaching a valuation of over US$1 billion. Compared to earlier-stage startups, unicorns have business models that are already validated and are more focused on accelerating growth.
But how has the massive shock of the coronavirus and the measure made to contain it impacted unicorns? Which are now poised for supercharged growth and how are others evolving to meet a a rapidly changing world?
In this iSTOX Insights research report, produced by Zero One Research, we explore these topics and more.
- How COVID-19 has upheaved the business and operating landscape for unicorns. Lockdown measures, heightened hygiene awareness and increased travel restrictions are the realities faced by unicorn companies in the new normal, on top of a global recession hampering consumption.
- Unicorns supercharged by the pandemic: e-Commerce, FinTech and Remote Work/Study. Digital platforms have experienced massive adoption as consumers and businesses alike are realizing that they don’t need a physical space in order to interact and transact.
- Unicorns forced to pivot by the pandemic: Travel & Hospitality, Ride-hailing. Fear of infection and travel restrictions have hampered the bread-and-butter businesses of many unicorns, forcing them to offer new products & services in the interim. Super-app unicorns (or apps that house a range of sub-apps serving many different functions) have proven more resilient, as they are easily able to switch to other businesses like on-demand delivery and fintech.
Singapore-based iSTOX is the world’s first integrated platform for digital securities. Regulated by the Monetary Authority of Singapore (MAS), iSTOX uses proprietary technology to directly connect buyers and sellers. In so doing, iSTOX provides accredited investors with access to previously out-of-reach investment opportunities, including private equity, hedge funds, private debt and more.
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