Why tech unicorns should get smaller individual investors on board

FOOD Delivery platform DoorDash filed for its long-awaited initial public offering (IPO) in the United States in November. The tech unicorn is expected to be priced at US$28 billion or more, significantly higher than the US$16 billion valuation it fetched in a private round earlier in the year. In Singapore, the listing of Nanofilm Technologies in October was the biggest IPO in eight years for the Asian financial hub. Shares were 23 times oversubscribed.

Around the world, there is strong appetite for investing in unicorns, which have performed phenomenally well, offering returns not available among assets of comparable risk. But the barriers to unicorn investing are also stark. Pain points in the issuance process prevent unicorns from reaching out to the biggest pool of investors possible. This hurts the startups, their existing investors as well as smaller investors who are left in the cold.

Defined as privately-owned startups valued at US$1 billion or more, unicorns are technology companies disrupting a traditional industry through a fundamentally different way of delivering a product.