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This is how unicorns have changed our lives

COVID-19 encouraged the creation of new companies from different sectors, more innovative, with greater technology and with a growth potential never seen before.

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This article was translated from our Spanish edition. Opinions expressed by Entrepreneur contributors are their own.

Startups have not only managed to position themselves successfully in the global market; They have also developed new tools to improve the quality of people and enhance the economic development of the countries. Some of them have grown so exponentially that they are now unicorns in an expanding ecosystem.

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This has been achieved thanks to the growing adoption of new technologies, this digital transformation was largely caused by the COVID-19 pandemic, but despite the fact that for many industries the sanitary restrictions had a great impact on their finances , for startups represented a growth opportunity.

“COVID-19 encouraged the creation of new companies from different sectors, more innovative, with greater technology and with a growth potential never seen before. These projects largely respond to the new needs of the population; For this reason, Venture Capital (VC) funds saw a great growth opportunity in these companies, they invested in them and, today, the most promising are already unicorns ”, said Modesto Gutiérrez, President and Cofounder of Miio , the first telcobank of Mexico and Latin America.

These are companies such as Nubank, Clip, Bitso, Mercado Libre, Rappi, Kio Networks, Softtek or Kavak , which have made the Venture Capital industry a growing market in the country and the world. According to figures from the Mexican Association of Private Capital (AMEXCAP), the flow of private capital investment in Mexico grew 4.2 times prior to the health contingency, which has made Mexico a hotbed for this ecosystem.

Constant work and commitment is vital for a startup to become a unicorn; However, it should be noted that there are other factors that have potentiated this transformation, such as:

  • Disruptive innovation
  • A scalable business model
  • More direct communication and interaction channels with the client
  • They build a relationship of trust and care about the user experience.
  • They have a significant impact on society.
  • They offer innovative alternatives to common problems.
  • They explore new market alternatives.

In Mexico, in 2020 a population of 84.1 million internet users was estimated, according to the "National Survey on Availability and Use of Information Technologies in Homes (ENDUTIH) 2020" , prepared by the Federal Institute of Telecommunications (IFT). That said, the digital landscape is key to the development and success of national startups, since access to the internet will determine their progress, while generating a better quality of life in society.

How have startups changed our lives?

Since its creation, the challenge of every startup has been to convince VC funds to obtain financing and expand their project. However, the growth and scope of these companies has been so favorable that more investors are betting on these business models.

Startups have made people's lives more practical. In the case of unicorns, their success has been a source of inspiration for other projects, and has also created an environment conducive to promoting investments and building trust among potential users.

Although not all startups have reached this goal, those that did have laid the foundations for an ecosystem with greater possibilities for development and growth.

Startups made life easier for us by reducing the travel time to go to a place, open a bank account, do the supermarket, buy basic necessities, rent a property, take out insurance, save, among many others.

Social unicorns

Today, people who had never made an online purchase or simply did not have the knowledge to download an app, or open a digital account, have before them the possibility of doing it in a simple and practical way. The startups changed their lives because they allowed them to access products and services that they otherwise would not have been able to obtain, thus reducing poverty and social inequality.

Startups, particularly unicorns, tie in with the Sustainable Development Goals defined by the United Nations (UN) , particularly those related to ending poverty in all its forms and worldwide, generating jobs dignity, reducing inequalities, building resilient infrastructure, promoting sustainable industrialization and fostering innovation as well as economic growth.

In the case of unicorns, their success has been a source of inspiration for other projects / Image: Sofía Ugalde, Entrepreneur en Español

According to the agency, 700 million people in the world are in a serious situation of poverty, so companies such as Fintech pay positively in this situation by providing access to innovative financial services, tools for better management of the spending and improve the quality of life.

Currently, startups face constant challenges, however they have proven their resilience and adaptability to challenging environments, therefore these companies still have great potential ahead and their benefits will be even greater in the future.