The mythical unicorn is millenia old, and hails from China or Greece or India or Mesopotamia. The modern unicorn is a decade old, and hails from Silicon Valley. 

But the shiny horn doesn’t hold quite the same aura as when Cowboy Ventures founder Aileen Lee coined the term for billion-dollar startups in November 2013. Today’s unicorns form “a bloated herd that will thin in coming years,” Lee and chief of staff Allegra Simon predicted in a follow-up post published Thursday. 

A decade ago, the financier identified 39 venture-backed startups in the U.S. with a valuation of US$1 billion or more. (Facebook was the alpha of that herd.) For 2023, Lee and Simon found 532. But 93 per cent of those are “papercorns,” firms with valuations on investors’ private books but without the exit or liquidity event to publicly validate that figure.

Some startups may soon find they’re worth considerably less than when they last raised. Cowboy noted that three-fifths of the unicorn herd were last valued between January 2020 and March 2022, when we were in the go-go-go times. Money was flooding into both funds and firms. Public-market investors were cutting huge cheques to privately-held firms. Valuations were high. Money was free.

With interest rates on the floor, large investors sought returns from alternative assets like venture funds. But as monetary policy tightened, they pulled back. Money is never free. 

Lee and Simon dubbed the billion-dollar startups of the nine quarters of the funding boom “ZIRPicorns,” for the zero interest-rate policy amid which they were anointed. As they return for fresh funding, some may lose their horns. But like any good myth, there’s a redemption arc. The VCs expect plenty of the herd to justify and even exceed their valuations. Many may exit successfully. 

Of course, Canada’s tech sector crowned plenty of its own new billion-dollar startups over the last few years—from Ada and Cohere, through LayerZero and Neo Financial, to Semios and TensTorrent. 

As long as we’re adding new species to the unicorn classification, consider also “AIcorns,” unicorns born into artificial intelligence, the one sector where valuations are still soaring. Or “expatcorns,” unicorns headquartered elsewhere but founded by secret Canadians, like AppDirect or Slack. (I’d personally go with “Ryancorns”—did you know both Reynolds and Gosling are Canadian?) Or perhaps “arbitragecorns,” U.S. unicorns with major offices in Canada, where talent is cheaper and the dollar is weaker.

Send us your suggestions for new unicorn types. And in the meantime, watch to see which of the current herd prove to be the real, mythical thing, and which are just horses in party hats.