Digest Finance

Capitalization of International Uniсorn Companies: To What Extent Is It Reasonable?

Vol. 23, Iss. 1, MARCH 2018

PDF  Article PDF Version

Received: 11 December 2017

Received in revised form: 25 December 2017

Accepted: 16 January 2018

Available online: 30 March 2018


JEL Classification: F21, F36, F41, F63

Pages: 63–67


Butuzova A.S. Lomonosov Moscow State University, Moscow, Russian Federation


Importance The article addresses unicorn companies as the most successful and fastest-growing start-ups. It analyzes to what extent their capitalization is justified, what prospects for growth they have after IPO, and how they meet investors' expectations.
Objectives The objectives of the study include a comprehensive review of creation and development of unicorn companies, identifying the sources of their growth and credibility of their open market valuation.
Methods The study employs methods of analysis, synthesis, retrospective analysis, comparison, and compilation.
Results The paper shows why unicorns are overvalued in the market. It emphasizes that the possibility and expediency of unicorn capitalization depends on the interests pursued by market actors. The practicability of IPO and its implications also vary from company to company.
Conclusions and Relevance High capitalization of unicorn companies is not reasonably feasible in every instance: investors are often riding on the wave of a boom, after which the value of business falls to zero. However, high-tech and innovative unicorns, on the contrary, are drivers of development and their high capitalization is indeed justified.

Keywords: unicorn company, capitalization, IPO, securities market, venture capital


  1. Malinina E.V. [The role of capitalization in the modern world economy]. Finansy i kredit = Finance and Credit, 2011, no. 13, pp. 63–66. URL: Link (In Russ.)
  2. Filatova A.S., Zhuk S.S. [Startups – Threats, Opportunities and Prospects for Corporations]. Aspirant, 2016, no. 8, pp. 116–120. (In Russ.)
  3. Nazarov A.A. [Russian Venture Capital Market: Status and Trends]. Ekonomicheskie nauki = Economic Sciences, 2016, no. 139, pp. 48–52. (In Russ.)
  4. Valdaitsev S.V. [An 'open' model to finance innovative start-ups]. Innovatsii = Innovations, 2011, no. 11, pp. 47–52. (In Russ.)
  5. Litvintsev D.O. [IPO of the innovative company as the exit method from venture fund in Russia]. Sibirskaya finansovaya shkola = Siberian Financial School, 2016, no. 5, pp. 137–141. (In Russ.)
  6. Babaev E.D., Zhuravlev A.Yu. [Startup as a venture capital investment object: Issues and features]. Science, Education, Society: Trends and Prospects: materialy 1i mezhdunarodnoi nauchnoi konferentsii [Proc. 1st Int. Sci. Conf. Science, Education, Society: Trends and Prospects]. Los Gatos, Professional Science, 2016, pp. 29–34.
  7. Nureev D.S. [Financial aspects of market value appraisal of the high-tech sectors companies]. Nauchnoe obozrenie = Science Review, 2015, no. 20, pp. 327–340. (In Russ.)
  8. Lugachev M.I. [Information revolutions, economics and economic education]. Vestnik Moskovskogo Universiteta. Seriya 6: Ekonomika = Moscow University Economics Bulletin, 2017, no. 4, pp. 142—–160. (In Russ.)
  9. Vyalov D.A. [Domestic IT-startups: Competitiveness in the global market]. Sodeistvie razvitiyu malogo i srednego predprinimatel'stva: zarubezhnyi opyt i rossiiskaya praktika = Promoting Small and Medium-Sized Businesses: Foreign Experience and Russian Practice, 2014, no. 1, pp. 153–158. (In Russ.)
  10. Aleinikova O.I. [Startup as an irreversible way of business development]. Innovatsii v upravlenii regional'nym i otraslevym razvitiem: materialy Vserossiiskoi s mezhdunarodnym uchastiem nauchno-prakticheskoi konferentsii [Proc. Sci. Conf. Innovation in Managing the Regional and Sectoral Development]. Tyumen, TIU Publ., 2014, pp. 21–24.

View all articles of issue


ISSN 2311-9438 (Online)
ISSN 2073-8005 (Print)

Journal current issue

Vol. 23, Iss. 3
September 2018