Latest update to our billion-dollar data project: 85% of tech companies reached a billion-dollar valuation by sticking with their founding CEO
We’ve always believed that great companies can come from anywhere. In October 2014 we launched a first-of-its-kind analysis illustrating the international distribution of software companies that have reached a valuation of $1 billion.
Contrary to popular perception, over the past ten years the majority of billion-dollar software companies were actually founded outside Silicon Valley. In the first update to our research, published today, we see that the rest of the world is continuing to outpace the Valley.
This time, we’ve also looked at the leadership it takes to reach the billion-dollar milestone. New metrics reveal ‘founder CEOs’ are far more likely than ‘professional CEOs’ to lead a business to this level of valuation.
As we studied new entrants to the list and analysed the leadership of all 156 companies meeting the mark, some surprising trends emerged:
The gap is widening
Another 13 companies have hit the billion-dollar milestone, amounting to 156 in total – with 63% (↟2%) now being founded outside Silicon Valley.
- These companies now come from 18 different countries with Lazada in Malaysia and Adyen in the Netherlands joining the ranks in November and December respectively.
- Of the 13 new companies, three were founded inside Silicon Valley, and ten outside (two from Europe, six from Asia and two from other parts of the US.)
- 63 out of 156 billion-dollar companies founded in the last decade hit the milestone in 2014 – a record-breaking year compared to 46 in 2013.
- In terms of sectors, Travel and Transportation made the biggest jump since our last update, with the addition of three companies – Olacabs, Didi Dache and Kuadi Dache.
Founder CEOs more likely to push through billion-dollar barrier
Our new metrics analysing the leadership of billion-dollar companies show that fast growing start-ups do better when founders remain at the helm. 133 (85%) companies pushed through the billion-dollar threshold by sticking with their founder CEO.
And this is a growing trend. Of the 27 companies founded since 2010 that have reached billion-dollar status, only one does not have a founder CEO. Conversely, more than 21% of companies founded prior to that date had replaced their founder CEO before reaching a billion-dollar valuation.
- 144 out of 156 (92%) companies started out with a tech- or product-driven founding team, signalling the overwhelming likelihood of success in technology with engineers at the top. Very few companies (12 in all) managed to surpass the $1B mark without such leadership.
- A sector breakdown shows there are some types of business more likely to replace their founder on the road to reaching the billion-dollar milestone. 67% of companies in Enterprise Data & Infrastructure have a founder CEO, 78% of companies in Enterprise Apps, and 79% in Gaming.
As we said, this is the very first of our now regular quarterly updates to the billion-dollar data. We look forward to seeing how the data changes and what new trends emerge over the coming months. You can explore our research in more detail here, or download the full dataset here