When you think of the word unicorn, you tend to envisage a mythical horse-like creature from a fantasy land, not an enterprise at the height of the corporate world.
But the term is also used to classify a startup business worth $1 billion — and there’s been a rise in the number of these companies across the globe and in Australia.
According to the market analysis firm CB Insights, there were 295 unicorn startups globally at the end of 2018 including one based in Australia, graphic design software giant Canva.
However, by 2024 the number of unicorn startups surged to 1,257 globally and eight based in Australia.
The majority of these unicorns, including Canva, are currently based in Sydney.
The others include online retailer Pet Circle, workplace software firms Employment Hero and SafetyCulture, as well as NFT and blockchain gaming company Immutable.
The Melbourne-based startups Linktree and Culture Amp, as well GO1 in Brisbane, were also included in latest list, last updated in December.
Employment Hero
Founded in 2014 and based in Sydney, Employment Hero is an engagement platform that helps with recruitment, HR, employment and payroll.
It provides employment-related software, solutions and services.
“We are just at the very start of our journey in supporting SMEs (Small and medium enterprises) and their employees to provide the best quality employment that we possibly can so really, for the future for us is huge,” Employment Hero CEO Ben Thompson said.
SafetyCulture
Created in 2004, SafetyCulture is a technology company that provides tools that enable a safe culture within organisations, mitigating risks and improving workplace operations and processes.
According to its former CEO and founder, Luke Anear, the company currently has a target of 100 million users by 2032.
“We’ll continue to build great products for teams and even vehicles and managing fleets,” he said.
Canva
Since 2013, Canva has provided a graphic design platform for users to create presentations, websites and promotional material.
Robert Kawalsky, head of product at Canva, said the company was focused on using technology to redefine “how the world creates, communicates, and collaborates” and “leveraging AI and intuitive design” to unlock “new categories of visual communication”.
Pet Circle
Pet Circle is an online pet retailer that provides products for dogs, cats, birds, horses, fish and other animals.
Created in 2011, its co-founder Mike Frizell said the future of the company was to “stay focused, to understand what a pet parent wants, continue to build, continue to grow and build an enduring, multi-decade company”.
Immutable
Immutable is a technology and crypto gaming firm.
It develops blockchain games and NFTs, co-founded by brothers James and Robbie Ferguson and Alex Connolly in 2018.
Late last year, the company was issued a Wells Notice by the US’s Securities and Exchange Commission, which the company says “non-specifically alleges violations of securities law and alleged misrepresentations”.
“We are confident in the legality of our assets and services,” the company says in a statement on its website.
Linktree
Linktree is a Melbourne-based platform behind a social media reference landing page that organises a list of a person’s or company’s associated links.
Culture Amp
Culture Amp is a Melbourne-based company that has provided employee surveys, analytics and feedback systems.
The company has been operating since 2009.
Go1
Go1 is a Brisbane-based technology firm behind a digital workplace training platform. It was founded in 2015.
Building of Australian startup strong ecosystem
Some of the startups that have reached unicorn status say Australia is becoming more fertile for startups reaping financial success.
“I think it’s even bigger and better now than it was a decade ago,” Employment Hero CEO Ben Thompson said.
Mr Thompson credited the founders of software giant Atlassian for paving the way for other startups in Australia.
“Scott Farquhar and Mike Cannon-Brookes were out there just championing Australia and Sydney as a place to start a business and receive capital and they really put a lot of time and effort into building that startup ecosystem,” he said.
Mr Farquhar and Mr Cannon-Brookes founded their company in 2001, with the pair having fresh bachelor degrees and a credit card with a $10,000 limit.
The duo went on to become the country’s first tech billionaires after putting Atlassian on the American stock exchange NASDAQ in 2015.
Mr Thompson credited the pair with “helping to rally” the Australian sector with a venture capital firm to invest in a range of startups.
“Those guys did an incredible job of creating that fertile paddock that we, all of these startups, could grow from.”
SafetyCulture CEO Luke Anear said he thought Australia “is as well placed as any country in terms of capability”.
But specific traits to Sydney could explain why the vast majority of the country’s unicorns are in the NSW capital.
Robert Kawalsky, head of product at Canva, said Sydney’s “multicultural environment and global perspective” made it “a great place to build products that solve real problems for communities worldwide”.
Mike Frizell, the CEO of Pet Circle, agreed that Sydney had seen a positive cultural change.
“In the last 10 or 12 years, the ecosystem has massively changed,” he said.
“The culture of the ecosystem here is very friendly, very supportive. People lean in and help each other pretty proactively.”
He predicts the uptick will continue, from a capital point of view.
“The venture capital investment world is strong in Sydney,” he said.
“It’s strong from a capital flow point of view, it’s strong from a network point of view.”
A cultural shift
The health of Australian startups sector comes following recent reports of the global sector facing hardships.
According to an industry report co-authored by Folklore Ventures and Cut Through Venture, the total capital raised by startups fell by $10.6 billion to $3.5 billion between 2021 and 2023, a decline resulting from high inflation, lifting interest rates and geopolitical instability.
Such turbulence has been observed in those startups considered successful, with some firms reporting financial losses in recent years.
But according to those researching the sector, the emergence of more unicorn startups in Australia is not unexpected.
Matthew Bright, an academic and lecturer with University of Sydney Business School’s Discipline of Strategy, Innovation and Entrepreneurship, believes this growth is part of a longer trend within Australia’s startup economy.
“I think really over the last decade or so, you’ve seen this great cultural shift towards Aussies seeing that they can build iconic Silicon Valley-style companies from Australia and certainly from NSW,” he said.
This trend mirrors what has been seen globally.
One 2023 paper, co-authored by a University of Maryland economist, reported that the number of US businesses, including startups, spiked during the COVID pandemic.
Data released by venture capital firm Airtree Ventures also supports this claim of a blooming startup ecosystem in Australia. According to the figures, there were 24 startups worth more than $100 million in 2010. By 2024, this number was 139.
Looking forward, Mr Bright predicts that Australia’s startup sector will continue to proliferate and change with more startups being developed, something that could in turn potentially reduce the space’s gender gap.
Only 26 per cent of the Australia-based startups that raised capital in 2023 had at least one female founder, according to the Folklore Ventures and Cut Through Venture report.
The same paper noted that, of the 286 founders contacted, more than half identified as white.
“It’s definitely something that takes time to build that ecosystem,” Mr Bright said.
“But you’ve now got the elements of that there that the venture funds have been really pivotal in nurturing young companies.”
