It’s no secret a lot of people don’t like the newly-coined term for billion dollar technology companies — “unicorns.”
It came about when technology startups with a billion dollar valuation were “rare” and “special,” just like the mythical beast.
But one of the issues critics have with the term “unicorn” is that technology companies with valuations over $1 billion (£700 million) are now fairly common, with 13 in London alone — and countless more in Silicon Valley.
Their popularity has risen so much in recent months that some sceptics have suggested we just name them “horses” or “donkeys.”
These same sceptics will likely be saddened to hear that a new animal name for technology startups was floated on Tuesday by the boss of a New York-headquartered venture capital analysis firm.
Writing in his daily newsletter, CB Insights CEO Anand Sanwal, proclaims “2016 will be the year of the rabbits.”
What are tech rabbits?
Rabbits are supposedly real companies building interesting technology. The term came about because Sanwal believes there’s going to be a new group of technology startups that aren’t unicorns but they aren’t “unicorpses” either.
(A “Unicorpse” is the term given to a dead unicorn, by the way.)
Sanwal writes: “With 152 (unicorns), there will of course be some flameouts or those that run into issues. These are not riskless bets after all.”
He continues: “While it’s ‘fun’ in a schadenfreud’y way to claim some absurd number of unicorns will falter in 2016, it misses out on the fact that 2016’s climate may force many of these unicorns to become RABBITs.”
When I posted a screenshot (above) on Twitter, Mark Scott, the European technology correspondent for The New York Times jokingly said it “seems legit”, adding that he plans to buy every website with “rabbit” in the URL.
Derek Du Preez, an editor at Diginomica, simply wrote: “I can’t cope.”
Last October, Mark Suster, an entrepreneur who sold his business to Salesforce before becoming a venture capitalist, called into question the valuations being achieved by many of today’s technology startups.
The Upfront Ventures general partner published a blog post where he predicts what will happen to the venture capital market in 2016.
In Venture Outlook 2016, Suster wrote, “our late-stage, privately held technology market is clearly in a bubble,” adding that “we’re doomed to repeat history. Boom and bust.” Suster believes that the “over-heated private tech markets will cool” in 2016, however, he concedes that he’s been saying that for the last two years.
“Either we’ve discovered magical beans and elixir or perhaps we’ve gotten ahead of ourselves on valuation,” said Suster.