Financial Efficiency of Unicorns: Regional and Sector Related Aspects

Inga Kartanaitė; Rytis Krušinskas

doi:10.5755/j01.ee.33.2.30798

Authors

Inga Kartanaitė Kaunas University of Technology, Lithuania
Rytis Krušinskas Kaunas University of Technology, Lithuania

DOI:

https://doi.org/10.5755/j01.ee.33.2.30798

Keywords:

unicorns, financial efficiency, IPO, business sector, region

Abstract

The curiosity of how startups become unicorns is increasing. Only one-fifth of unicorns operating in the world trade their shares publicly. Financial data from the balance sheets and profit (loss) statements of 97 unicorns, which had IPOs between 2009-2018, was collected with the aim to analyse what specific characteristics of financial ratios over a particular IPO related period can be identified for unicorns operating in different regions and sectors. ANOVA was used to analyse the financial efficiency from different perspectives: (I) the financial profile of a unicorn, (II) the financial efficiency of a unicorn based on the business sector (Software; Products and Services; Technology; Internet and Healthcare sectors), and (III) the financial efficiency of a unicorn based on the region of origin (US+, Europe and Asia). Research showed that unicorns are mostly financed by investors, but remain unprofitable. Positive profitability was found in Europe, and the highest liquidity - in Healthcare sector.

Author Biographies

Inga Kartanaitė, Kaunas University of Technology, Lithuania

Inga Kartanaitė, PhD student in the field of Economics at Kaunas University of Technology, School of Economics and Business, Lithuania. Financial efficiency, financial management and modelling are her main research areas. Her educational background is in Management and business administration (B.S.) and Accounting and audit (M.S.).

Rytis Krušinskas, Kaunas University of Technology, Lithuania

Rytis Krušinskas, Ph.D. Professor of Corporate Finance at Kaunas University of Technology, School of Economics and Business. His bachelor is in Mechanical Engineering, M.Sc. in Industrial Engineering and Management. Research interests are in the areas of financial management, cost – benefit analysis, strategic financial management decisions, technology investment valuation, financial planning and modelling.