Unicorns (companies valued at more than $1 billion) are no longer a *rara avis* in the entrepreneurial ecosystem. But reaching this category does not mean the end of the road. Decacorns (companies valued above $10 billion) and hectocorns ($100 billion) mark a new stage of global impact for these high-growth companies, signaling the maturity of venture capital, the rise of sectors such as artificial intelligence, and regional disparities in financing, regulation, and talent.
The transformation of the entrepreneurial ecosystem into new valuation “statuses” reflects both the maturity of venture capital and the impact and rise of sectors such as artificial intelligence. But it also highlights regional asymmetries in terms of capital, regulation, domestic market, and access to talent.
In 2013, Cowboy Ventures founder Aileen Lee coined the term *unicorn* to refer to those tech-based companies valued at over $1 billion without being publicly traded. A decade later, the term has fallen short to define companies such as OpenAI, Stripe, or ByteDance, whose valuations have far surpassed that figure.
Decacorns are private companies that have reached a valuation of at least $10 billion. Hectocorns, in turn, represent an even more select category: companies valued above $100 billion. According to the Global Top 100 Unicorns report (https://www.pwc.com/gx/en/industries/technology/publications/global-top-100-unicorns.html), prepared by PwC, there are 44 decacorns compared to 26 in 2021, and 2 hectocorns.
These giants are not only larger, but also more resilient, more capital-intensive, and with a much greater potential impact in their sectors. They represent the apex of the global entrepreneurial pyramid and, in many cases, are precursors of future multi-billion-dollar IPOs or strategic acquisitions.
From unicorns to decacorns and hectocorns: the path to the elite
For high-growth companies, becoming a decacorn or hectocorn is the result of a combination of funding, backing from institutional investors, a scalable business model, and sector leadership. According to Tracxn’s Monthly Unicorn Report (https://tracxn.com/d/unicorn-monthly-report ), the average time it takes for a company to move from unicorn to decacorn is 2.8 years, with about 5.4 additional funding rounds and an average of 11.4 institutional investors involved.
This leap also implies a significant capital injection: on average, $1.5 billion from the time they reach unicorn status until surpassing $10 billion as a decacorn. Companies such as OpenAI ($10.3 billion in funding after becoming a unicorn), Airtable ($1.2 billion), or Swiggy ($3.2 billion) are examples of this dynamic.
The sectors most represented among the new decacorns and hectocorns reflect current venture capital trends: artificial intelligence, digital infrastructure, fintech, and B2B platforms dominate the landscape. For example, OpenAI, now valued at $500 billion, leads the new generation of companies focused on generative artificial intelligence.
The United States, home of decacorns and hectocorns versus Europe and Latin America
The distribution of decacorns and hectocorns worldwide highlights a well-known reality in the tech ecosystem: the concentration of these giants in a few global hubs. According to the Tracxn report, the United States has produced 28 decacorns, compared to 14 from China.
According to PwC’s study The grass is greener on the other side (https://www.pwc.com/gx/en/industries/technology/publications/grass-is-greener.html), 55% of all global unicorns are located in the U.S., which also represents 75% of the total value of all unicorns, while Europe does not reach 10% in number and just 3% in value.
Both Latin America and Europe have demonstrated the ability to generate unicorns and competitive scaleups, but the leap to decacorn valuations remains an exception. In the Old Continent, only a minority of unicorns have reached the $10 billion threshold, such as Global Switch (https://www.globalswitch.com/) in the UK or Celonis (https://www.celonis.com/) in Germany, according to data from Failory (https://www.failory.com/).
In Latin America, although decacorns are still an exception, the ecosystem has made important strides. It is estimated that the region has between 30 and 40 unicorns, and countries such as Brazil, Mexico, Argentina, and Colombia have produced high-growth companies with international projection such as Rappi (https://www.rappi.com/), Tiendanube (https://www.tiendanube.com/), or Kavak (https://www.kavak.com/). In fact, the latter, with an estimated valuation of $8.7 billion, is one of the few startups approaching the decacorn barrier.
The long road to becoming a decacorn or hectocorn
According to El auge del ecosistema emprendedor tecnológico y las startups en América Latina: situación actual y desafíos (https://www.realinstitutoelcano.org/documento-de-trabajo/el-auge-del-ecosistema-emprendedor-tecnologico-y-las-startups-en-america-latina-situacion-actual-y-desafios/), prepared by the Real Instituto Elcano, limited access to late-stage financing or still nascent regulatory frameworks for scaleups hinder the leap from unicorn to decacorn status.
In Europe, this evolution is also challenging. According to PwC’s The grass is greener on the other side (https://www.pwc.com/gx/en/industries/technology/publications/grass-is-greener.html), only 8% of global unicorns originate in the European Union and represent barely 3% of total aggregate value. Market fragmentation, linguistic and regulatory barriers, and lower venture capital intensity compared to the U.S. are the main obstacles.
Moreover, many European founders choose to relocate their startups to the U.S. at later stages to access larger funding rounds or more integrated markets. PwC’s report indicates that 64 unicorns have emigrated from Europe, compared to just 10 that have moved into the region.
A combination of factors drives the evolution from unicorns to decacorns or hectocorns. In addition to being highly innovative companies capable of transforming entire sectors, or creating disruptions such as that of OpenAI, to reach such heights of success unicorns must be attractive to investors and able to sustain very rapid large-scale growth. Unicorns have ceased to be the mythical creatures of the innovation ecosystem, giving way to decacorns and hectocorns.
* Text translated with AI
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