STARTUP EVOLUTION

22 Feb 2022

Startup companies has several type, however, the phrase “startup company” has been associated with high growth, technology-oriented companies, many of which seek to disrupt an existing market or to create a new market. The unique idea or product and scalability possibility can attract investor. Successful startups are typically more scalable than an established business, also, they can potentially grow rapidly with limited investment of capital, employees or land. Several funding option, such as venture capital firms, angel investors, or crown funding, can be considered to help startup growth.

We observe that many startup has begun in Indonesia. Startup trend has spread, from millennial generation to Z generation. This generations get tempted to begin startup for the profit and enormous growth. Let’s see the startup’s size evolution.

  1. Cockroach is the first level of the startup business. The valuation of the cockroach startup is less than $ 10 million (less than IDR 14.7 billion). Startups in this level are at the initial ecosystem of a startup.
  2. Startup in this level, pony, has a valuation of more than $10 million to $100 million. At this level, business competition is very hard that many companies are growing, but lack of resources.
  3. The third level, called the centaurs level. The valuation this startup is $ 100 million to less than $ 1 billion. Startups in this level have a strong ambition and goal to strive and grow to be Unicorns. These startups are seeking potential venture capital funds to keep scaling up the business.
  4. Unicornsare startups that are valued by venture capital one billion dollars or more, and always get attention of investors. This term applies only to startup that are stay privately owned. Therefore, when Facebook and Amazon go public, listed and sold out on the stock market, they are no longer called unicorns. Traveloka, Tokopedia, Bukalapak, OVO, JD.id are some unicorn from Indonesia.
  5. Decacorn. Decacornis a startup company with a current valuation of over $ 10 billion (IDR 140 triliun). Decacorns is the more evolved version of the Unicorn company. Gojek and J&T Express are mentioned to be decacorn in Indonesia.
  6. Hectocorn. Hectocorn or “Super Unicorn” is a startup company with a current valuation of over $ 100 billion. Most of them are tech, financial, or fintech companies. It is not uncommon that one of our familiar names such as Apple, Google, Microsoft, Facebook, Oracle and Cisco are examples of Heactacorn.

All startups want to become a unicorn startup, and it won’t be easy to reach. It takes innovation, hard work, consistency, and thoughtful business strategies to crawl up from the lowest valuation level to get unicorn status. In addition, their final destination is to be a Hectocorn startup. Investors play important role in reaching the startup valuation level. Therefore, startup company owners should attract and be able convince investors to invest in their startups.

References:

Picture: yahoo images

Linda Kusumaning Wedari, S.E., M.Si., Ph.D., Ak., CA., CLI., CSRS
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