Rapidly Growing Billion-Dollar Companies

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Rapidly Growing Billion-Dollar Companies

Tinder, Meituan, Yello Mobile and TransferWise are all unicorns that are less than ten years old and claim profitability. It should be noted that although this article from the Wall Street Journal is mostly behind a paywall, the headline and introduction indicates that there are concerns about whether these companies are being honest about profitability claims, since they are not required to disclose financial figures. This data should be ingested with that understanding.

TINDER

  • Tinder was founded in 2012 and in early 2019 was valued at about $10 billion.
  • Tinder is a dating app that allows people to connect only if they both choose each other. The app is location based so users can meet people wherever they are.
  • Tinder had $1.7 billion in revenue in 2018 and the parent company, Match, said that Tinder's profit margin is greater than 40%. Based on a 40% profit margin, the 2018 profit for the company was about $6.8 million (calculation below).
  • Some strategies that contributed to Tinder's growth were taking the stigma away from online dating, making targeting super local (within a mile) so people could meet quickly, and focusing on women.

MEITUAN

YELLO MOBILE

  • Yello Mobile was founded in 2012 and according to CB Insights is currently valued at $4 billion.
  • Yello Mobile started as a marketing company and now has transformed into a mobile business platform that operates in many industries including travel, media content, and retail.
  • In 2017, the company turned its first profit of 18.9 billion won ($15.8 million).
  • The company's growth strategy was to acquire startups and as of the first quarter of 2016, less than 4 years after its founding, Yello Mobile had 94 startups in its portfolio.
  • More recent profit figures were not available. There are currently diverse opinions on the state of the company. Some reports state that the company is on its way to failing, while others are talking about it reinventing itself and growing more.

TRANSFERWISE

  • TransferWise was founded in 2011 and according to CB Insights is currently valued at $3.5 billion.
  • TransferWise is a money transfer service which allows for international transfers without any hidden charges.
  • For the fiscal year ending March 2018, TransferWise reported $8 million in profit.
  • TransferWise grew by continually lowering its fees, as well as significantly undercutting the money transfer rates charged by banks.

OSCAR HEALTH

  • Oscar Health was founded in 2012 and according to CB Insights is currently valued at $3.2 billion.
  • Oscar Health provides health insurance.
  • For the first half of 2018, the company reported profits of $5 million, a significant change from the $57.6 million loss for the first half of 2017. However, another article reported that the company still was not profitable in 2018 with a total of $57 million in losses. Due to the small number of companies that were founded in the last 10 years with valuations over one billion that are profitable, the company has been included even though the profitability status is not completely clear.
  • The company grew by expanding the regions covered and by increasing enrollment.

CIRCLE INTERNET FINANCE

VOX MEDIA

WARBY PARKER

  • Warby Parker was founded in 2010 and according to CG Insights is currently valued at $1.2 billion. A March 2018 article had the company valued at $1.75 billion.
  • The company sells designer eyewear.
  • In March 2018, a company spokesperson stated that the company had become profitable in 2017. However, they declined to disclose any financial figures, including sales and profit.
  • The company grew by disrupting the eyewear market and offering glasses at a fraction of the price of competitors. The company designed their own glasses and avoided traditional distribution channels by engaging with customers directly.

RESEARCH STRATEGY

According to Crunchbase, a reputable business database, unicorns that are growing and making a profit are very rare. A May 2019 article stated the only ones they knew of were Zoom and TransferWise. While this take did not involve doing all the research to confirm this was true, the opinion holds weight as Crunchbase in the business of evaluating businesses.

Although we were able to find eight companies that claim they are profitable, we were not able to find the profit figures for all of them. In all cases, to locate the data on profit, we utilized the following strategies. First, we examined the websites for the companies, then business databases such as Crunchbase and ZoomInfo, and, finally, media sites such as Forbes, INC, and Fortune. In the cases where the profit was not found, we did find reporting that indicated the company does not disclose that information which means it is not publicly available. The majority of these companies are private and are not required to disclose their financial information.

The profit figures for Tinder were not publicly available and needed to be estimated.

Tinder: 1.7 billion * 40% = $6.8 million


Sources
Sources