In the world of entrepreneurship and start-ups, it's not uncommon to hear of all sorts of animal names, including unicorns, that represent a well-valued company. 

But have you ever heard of centaurs? These start-ups are beginning to overshadow unicorns, as they become a new investment security point. Here's how.

What are centaurs? 

First of all, let's take a look at what centaurs are.

Originally, in Greek mythology, centaurs were fantastical beings half-man (bust) half-horse (body). But, as you may have guessed, the definition isn't at all the same in the field of entrepreneurship.

In fact, centaurs refer to unlisted start-ups not listed on the stock exchange with recurring annual sales (ARR) of 100 million euros or more. Unlike other designations that can be awarded (which we'll discuss later in this article), centaur status is not based on a valuation.

What's the point of being a centaur?

When a start-up is referred to as a centaur, it's also a way of better reflecting its economic status to investors. To be more precise, it's an indicator that enables us to measure a company's success and profitability, without focusing on valuation, as unicorns can do.

Indeed, while one of the most important criteria for assessing a start-up's financial situation is the amount of funds raised, it is not the most relevant. Contrary to popular belief, very rapid growth is not always a sign of good profitability.

In this respect, since the crisis, more and more investors are finding it safer to invest in a centaury, as ARRs are much more reliable indicators of growth and performance. more reliable indicators of growth and performance (since they are recurring).

This is good, concrete evidence of the start-up's productivity and success, as well as of the level of risk involved in investing funds in it. 

In short, being a centaur means investment security. This status makes it easier for investors to assess the profitability of companies and their projects. 

Other statuses that start-ups can reach (unicorns, decacorns and pentacorns) 

Today, French and global start-ups can climb the ladder to achieve different statuses, such as centaur. However, this is not the only title that can be awarded, as there are others based on different criteria. Let's take a closer look at them right now.

Until a few years ago, unicorns were a rarity on the business market. But with the growing importance of new technologies and software, more and more companies are becoming unicorns.

These are start-ups that are not listed on the stock exchange, and which are valued at more than one billion euros (more precisely, between 1 and 10 billion). These include platforms such as Doctolib, Back Market and Veepee.

These days, centaur status is much compared to that of the unicorn, and some even believe that in terms of importance, it could soon replace it.

If these terms sound a little less familiar than unicorns, that's because they're even rarer. 

A unicorn is a start-up that has surpassed unicorn status, i.e. is valued at more than 10 billion euros. If you've never heard of one, it's because there are no decacorns in France. On a global scale, some of the biggest names in new technology are decacorns. These include Canva and Epic Games.

Once you've gone beyond the decacorn, you change status again. Start-ups valued at 50 billion or more are called pentacornsand there are even fewer of them. These include SpaceX and TikTok.

Centaur vs. unicorn: the major differences

In Europe, it's hard to say whether there are more unicorns or centaurs. In fact, although there are quite a few of them on a global scale, these two categories of start-ups are relatively few and far between compared to the number of companies that exist in the world.

The main difference between a unicorn start-up and a centaur start-up is their market valuation levels. In fact, unicorns are more highly valued than centaurs (1 billion euros versus 100 million euros). This means they have easier access to capital and larger investments. But as we've explained, this isn't always the case!

Unlike centaurs, most unicorns are larger and more mature. larger and more mature. They are often older, have acquired more experience and have more staff. In addition to their billion-euro valuation, they are often characterized by their size and success.

Centaurs are companies that have not yet achieved unicorn status, but are on the verge of doing so. They are less mature and still growing.

These start-ups generally have less access to capital and are more likely to seek short-term seek short-term investments. On the other hand, if they haven't achieved the coveted unicorn status, they remain just as interesting because of their rapid growth, promising prospects and potential for success. That's what attracts investors, in part.

What about the future of centaurs? 

As young and growing start-ups, the future of the centaurs will depend on their ability to offer innovative and effective solutions, that that meet consumer needs. They must also know how to adapt to a changing business environment, developing products and services that fit demand and different distribution channels.

What's certain is that centaurs innovating in technologies such as augmented reality, blockchain and artificial intelligence have a promising future, given that these are fast-growing sectors.

Start-ups that are centaurs 

We now turn our attention to start-ups that have achieved annual recurring revenues of 100 million euros or more, and have thus risen to the rank of centaur.

First of all, let's review what a start-up is. By definition, it's a young company that offers innovative products or services innovative innovative products or services in high-growth sectors new technologies.

Start-ups tend to be smaller and more flexible than more traditional businesses, and are also generally founded and managed by a group of entrepreneurs.

Their growth and evolution, the funding they receive and their valuation are all conditions for climbing the ladder to the status of centaurs, unicorns and so on.

In France, it's difficult to know the exact number of centaurs, as companies communicate less and less about their figures and results. However, a few can be counted with certainty, such as Mirakl and EcoVadis.

Founded in 2011 by Philippe Corrot and Adrien Nussenbaum, Mirakl is an e-commerce software solution that enables companies to create online marketplaces where third-party vendors can sell their products and services.

They can also manage their product catalogs, prices and inventories via the platform.

Mirakl also provides analytics and order management tools, to help manage relationships between sellers and buyers.

Mirakl passes the 100 million euro mark in early 2022.

EcoVadis is a company that provides comprehensive assessment processes Corporate Social Responsibility (CSR), which uses a global rating framework to provide comprehensive information on companies' commercial and responsible practices. 

Thanks to EcoVadis, companies can assess their operations in terms of environmental, social and governance (ESG) issues, and obtain up-to-date information on their performance. EcoVadis also offers training and advice to help companies better integrate sustainability into their procurement processes. 

For companies, it's a rating that testifies to their CSR efforts, guaranteeing their compatibility with purchasing policies.their compatibility with the purchasing policies purchasing policies.

 

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Caroline B - Freelance journalist