Does Unicorn Stimulate Competition or What? 


Rarzack Olaegbe

Andela is the latest unicorn. According to an email received from Iyin Aboyeji, he said “I am so excited to email you today. With tears of joy in my eyes and gratitude to God, Andela just announced its $200 million raise led by Softbank Vision Fund at a $1.5 billion valuation.


Welcome to the unicorn club. That was the title of the 2013 article written by Aileen Lee in TechCrunch. Lee, an American venture capitalist, is also the founder of. Eight years after that coinage Cowboy Ventures, unicorn is used to describe a financial behemoth.

In the article, Welcome to the unicorn club: Learning from Billion-dollar start-ups, Lee described unicorn as a privately held company with a billion-dollar valuation. She called such companies unicorns because they were few and far between. Only a few existed when she coined the term.

As of June 2021, research shows there are over 600 unicorns in the world. They have raised $442 billion in total. They are valued at around $2 trillion. These unicorns are so relatively uncommon. They have seen increasing success. They have gained market momentum. They are boosting the market. As such, they have mythical classification due to their rareness.

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A venture capitalist told me that the value of unicorns is generally determined by investors and venture capitalists. She said all the valuations hinge on whether the investors believe the companies will grow and develop over time. “Take it from me. It is all longer-term forecasting”, she said.

The valuations have nothing to do with their financial performance. Many of these businesses rarely made any money when they first started. Oga, if the start-ups-turned-unicorns do not make money, why are they called unicorns? Are you asking me? Yes. I would reach out to Lee. Whatever Lee’s answers are, you would get them. Thank you. I would be waiting.

Meanwhile, my venture capitalist friend said the investors do face some difficulties in their forecast. If there are no competitors in the industry, there would be no other business model to compare. That would make the process complicated. So far, out of the seven unicorns in Africa, Nigeria has six.

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These local unicorns are successful. Because there are other competitors in the industry. The business model is easy to forecast. Does that mean these six unicorns are making money? Yes, Big Mummy. But why are you so interested in the money making side of business? Making money is good business. If you are not making money, that is not good. That is called charity. Anyway, what are the names of these local champions?

Andela is the latest unicorn. According to an email received from Iyin Aboyeji, he said “I am so excited to email you today. With tears of joy in my eyes and gratitude to God, Andela just announced its $200 million raise led by Softbank Vision Fund at a $1.5 billion valuation. 

In the summer of 2014, I returned to Lagos with my friends to build the company that would become Andela. Jeremy Johnson, Christina Sass, Brice Nkengsa, Nadayar Enegesi, Ian Carnevale and I truly believed we could train world-class software engineering talent in Nigeria. We believe we could connect them to valuable, meaningful and high-earning jobs across the globe”.

He said Andela has over 300 employees. The company will use the new capital to increase the workforce. It will deepen its product. It will extend its engineering. It will heighten its growth. In addition, the company is investing in growth, continued expansion of technology and product development as well as merge and acquisition.

Johnson, the CEO, didn’t specify any acquisition targets. Andela was looking for talent networks to expand geographically or in terms of client and talent bases, as well as technology to enable it to better source and access talent while also managing delivery.

“There are a lot of moving pieces, so additional technology to do that faster is always interesting,” he added. “In the process, we are moving into AI as a part of that.”

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You said there are six unicorns here. Here is a list: Andela, Flutterwave, Interswitch, Chipper Cash, Jumia and Opay. Okay. Are they making money? Yes, Big Mummy. Although I have not seen their P and L. What’s P and L? Hmm, the profit and loss account. So, as my friend explained, Africa’s startup scene is still in its early stages. It is growing.

If venture capitalists are positive, there would be more startups that would achieve the unicorn status. From what you have said, does it mean the unicorns are stimulating competition, making money or what?

The unicorns are stimulating competition. For instance, in the fintech ecosystem Interswitch, Flutterwave, Paystack, TeamApt and Opay are competing. Take Flutterwave. Born in 2016, it facilitates international payments for African and international companies such as Facebook and Uber. It has touchpoints in five countries. Take Interswitch.

Born in 2002 when no one was interested in Africa, it did not get outside funding until recently. It processes 22 million debit and credit cards through its Verve offering. About 190,000 businesses use its platform to process transactions. It has footholds in three countries.

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The legacy fintech firms are looking over their shoulders. They are not afraid. They are just being watchful. Alert. They are aware that these unicorns have access to outside funding. The unicorns can spring surprises. Ok, does that mean the unicorns cannot become dinosaurs?

It depends. On what? I would not know. Maybe we could hold a Zoom meeting with Lee. She coined the term unicorn. I didn’t. Ok, when is the Zoom meeting? I am not Lee’s personal assistant. Who is her representative in Nigeria? The Unicorn Club.

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