Startups are now facing a reality check

The recent troubles of tech giant WeWork and Meta have indeed brought renewed scrutiny to the world of unicorn companies.

WeWork's bankruptcy and Meta facing legal battles from 41 US states, the focus on unicorn companies has intensified. The troubles have indeed brought renewed scrutiny to the world of unicorn companies.

There are certain high-growth, privately held startups, once seen as invincible symbols of innovation and disruption, are now facing a reality check amid market downturns and mounting legal challenges.

A survey says, The United States has the highest number of unicorn companies worldwide with an impressive 668 - over three times more than China in second place (172).

China has the second-highest number of unicorn companies, with a combined valuation of $641.67 billion, accounting for 17% of the total valuation of all unicorn companies in China.

India ranks third with 72 unicorn companies. However, when examining the rankings of individual companies, the top spots are predominantly occupied by the United States and China.

Singapore has emerged as a notable player in the global unicorn landscape, boasting 15 unicorn companies with a combined valuation of $88.91 billion. While this places Singapore third in the number of unicorn companies within Asia.

The research commissioned by FOREX.com can also reveal that the enterprise tech industry dominates unicorn companies, boasting a total of 377 with a combined valuation of just over $1 trillion.

Lessons to learn from the big tech giants:

WeWork's bankruptcy: The shared office space company's spectacular fall from grace, from a $47 billion valuation in 2019 filed for Chapter 11 bankruptcy protection, serves as a cautionary tale of overhyped valuations and unsustainable business models. It raises questions about the due diligence processes of investors and the potential for inflated bubbles in the tech sector.

Meta's legal woes: The legal battle could have significant implications for the future of Big Tech and the regulatory landscape governing online platforms.

With these high-profile cases as backdrop, investors and regulators are taking a closer look at the entire unicorn ecosystem. Concerns about inflated valuations, lack of profitability, and potential ethical lapses are coming to the fore.

It's important to note that the unicorn landscape is still evolving, and it's too early to predict definitive outcomes.