UK unicorns club welcomes newest member, but what is a unicorn and

The UK can today boast more than 30 active ‘unicorns’, as another young challenger was added to the ranks.

Used car marketplace Motorway said on Monday morning that its valuation had topped US$1bn (£0.75bn) following a fresh US$190mln funding round.

This means the company now gets awarded its honorary sparkly horn, under the unstated rules of business unicorn classification.

Depending on your sources, Britain’s business landscape suffers from a deep sickness, or is an increasingly fertile source, but either way it counted at least 80 unicorns at the start of 2020, with the running total topping 100 several weeks ago (and let’s not even mention ‘futurecorns’).

Many of these fantastic beasts share similar characteristics –  but overwhelmingly have a strong tech element.

Like many of its single-horned ilk, Motorway was founded only a few years ago (2017) and has grown very fast. Other similarities include a string of venture capital backers, in this case Index Ventures, Latitude, Unbound and ICONIQ Capital, along with industry investment in the form of BMW i Ventures.

The London Stock Exchange has welcomed several former unicorns in the past year and a bit, including Darktrace, Hut Group, Oxford Nanopore and Wise, while some like electric vehicle developer Arrival SA and car marketplace Cazoo Group Ltd (NYSE:CZOO) have chosen to list in the US.

The trend to remain private for longer, known as ‘de-equitisation’, still remains and there are various reasons.

It is partly because companies can access plenty of funding from venture capital firms and other forms of private equity, with these firms also providing support, expertise and business networks to help accelerate growth.

“Private equity owned businesses tend to grow faster and are often in segments or sub-segments of industries that are badly represented on public markets,” Helen Steers, a partner of Pantheon Ventures and advisory board member for many VC funds, told us earlier this year.

UK’s notable unicorns

Britain’s best-known unicorns are possibly led by Brewdog, the Scottish owned brewer, which has been eyeing up a public listing for a while but keeps stumbling into new issues.

Are there more people who have sunk a can or pint of Punk IPA or Dead Pony Club or who own a Revolut business and current account? Either way, the fintech star has by far the larger valuation, calculated at US$333bn in July as it raised US$800mln. This made it bigger than NatWest Group, Legal & General and Aviva.

Perhaps even better known outside of the City is Monzo, another where a stock market listing is also mooted for the digital challenger bank founded in 2015. Although its current accounts and coral-coloured cards have some attractive features, the company has not been free of trouble, with the Financial Conduct Authority currently recently launching an…