What is ‘Unicorn Company’ often mentioned in Indian news?
- (a)Any privately held startup company with a value of over $ 1 billion
- (b)Any public sector company to be merged with another public sector company
- (c)Privatization of any loss-making State-owned company
- (d)Any foreign multinational company doing business in India in collaboration with an Indian company
Correct — A, Any privately held startup company with a value of over $ 1 billion. That is the definition as it is used everywhere in business writing: a unicorn is a privately held startup valued at a billion dollars or more and not listed on a stock exchange. The venture capitalist Aileen Lee coined the word in a 2013 article titled Welcome To The Unicorn Club, choosing a mythical animal because a startup reaching that valuation was then statistically rare. Two conditions have to hold together. The company must still be private — a listed firm worth a billion dollars is simply a listed firm — and the valuation must come from what investors paid in its most recent funding round, not from profits or assets. India's tally of such companies rose sharply in 2021, which is what put the word into the Indian news pages this question was drawn from.
- (b)Any public sector company to be merged with another public sector company — Describes the consolidation of public sector undertakings, which is a policy of the Department of Investment and Public Asset Management and has nothing to do with startup valuations. A unicorn is by definition not a State-owned company.
- (c)Privatization of any loss-making State-owned company — Privatisation of a loss-making State enterprise is strategic disinvestment. A unicorn is a young private company being valued upward by investors, which is close to the opposite situation.
- (d)Any foreign multinational company doing business in India in collaboration with an Indian company — A foreign multinational operating in India through a tie-up is a joint venture. Nothing in the definition of a unicorn concerns nationality or collaboration; it concerns valuation and the fact of remaining unlisted.
Startup valuation language runs in animal metaphors. A unicorn is a privately held startup valued at over a billion dollars; a decacorn is worth over ten billion and a hectocorn over a hundred billion. The valuation is a paper figure derived from the price at which the newest investors bought their stake, multiplied across the whole company, so it moves with funding-round sentiment and can fall as fast as it rises. Once such a company lists on an exchange it stops being called a unicorn, whatever it is worth. The Department for Promotion of Industry and Internal Trade recognises startups under the Startup India programme, and the growth of Indian unicorns has been a standing item in the Economic Survey.
The question is pure definition, and the option set is built so that the three wrong answers all belong to the vocabulary of public sector reform — mergers, privatisation, foreign collaboration — while the right one belongs to venture capital. If you can place the word in the correct field you have the mark. Two details are worth carrying beyond the exam. First, the threshold is a dollar figure, not a rupee one, and it is a valuation rather than revenue or profit; several well-known unicorns have never turned a profit. Second, the count keeps moving: India's unicorn tally, which was in the double digits when this April 2022 paper was set, stood at 131 in a March 2026 compilation, against a global count of over thirteen hundred companies in late 2025. Treat any number attached to unicorns as dated the moment it is printed.
- A unicorn is a privately held startup company with a current valuation of one billion US dollars or more, not listed on a share market.
- The venture capitalist Aileen Lee coined the term in 2013 in an article called Welcome To The Unicorn Club.
- The valuation is derived from the price paid in the most recent funding round, not from profits or assets.
- A decacorn is valued above ten billion dollars and a hectocorn above a hundred billion.
- India's unicorn count grew rapidly from 2021 onward and stood at 131 in a March 2026 compilation.
- Thinking a unicorn must be profitable. The test is valuation, not earnings.
- Including listed companies. The definition requires the company to be privately held.
- Memorising a unicorn count as a fixed fact. The number changes every few months and should always be dated.
As a what-does-this-term-mean item, or as a statements question distinguishing unicorns from other categories of company.
No directly related past PYQ was found.
- practice — not a real PYQ
A privately held startup company valued at more than ten billion US dollars is commonly referred to as a
- (a)unicorn
- (b)decacorn
- (c)hectocorn
- (d)gazelle
Answer(b) decacorn — ten times the unicorn threshold. A hectocorn is valued above a hundred billion dollars.
- practice — not a real PYQ
Which one of the following is true of a company described as a unicorn?
- (a)It must be listed on a recognised stock exchange
- (b)It must have reported a profit in the preceding financial year
- (c)It must be privately held and valued at over one billion US dollars
- (d)It must be a public sector undertaking earmarked for disinvestment
Answer(c) It must be privately held and valued at over one billion US dollars — listing ends the label, and profitability is not part of the test.