Whenever a private company attains a valuation of $1 billion, we call it a unicorn. That’s because it used to be very rare for this to happen.
In the past, it was normal for a company to go public once it had something like $100 million in revenue and a sub-$1 billion valuation.
Amazon is a perfect example. It went public in 1997. It generated $147.8 million in revenue that year, and its enterprise valuation was a mere $438 million.
But unicorns aren’t rare anymore.
As of June this year, 44 more companies had joined the list in 2020, bringing the total count of unicorns to over 600. And we see news headlines peppered with the term.
However, while we have seen many unicorns in recent years, “decacorns” are still very uncommon. Decacorns are private companies that are worth more than $10 billion.
And a new one was just “minted” that very few have ever heard of.
The Fastest-Growing Segment of Enterprise Software
UiPath just completed a $225 million Series E round, propelling it to a valuation of $10.2 billion. And consider this – UiPath was only worth $3 billion after its Series C round in November 2018. The company’s valuation shot up over $7 billion in less than two years. That’s impressive.
And the onslaught of capital pouring into UiPath speaks to the work it is doing on robotic process automation (RPA).
RPA uses software and artificial intelligence (AI) to help companies automate their business and manufacturing processes – the kinds of tasks that have been slow and arduous for humans. This improves gross margins and makes businesses dramatically more efficient.
RPA might not sound exciting, but it is the fastest-growing segment of the enterprise software industry.
And here’s the big picture: The fact that a private company has attained a valuation of more than $10 billion in this sector tells us that the market for adopting this kind of technology is accelerating.
RPA hasn’t been around that long. After struggling to get off the ground, UiPath pivoted to RPA in July 2015.
At that time, UiPath was only worth $7 million. That means robotic process automation has taken the company’s value from $7 million to $10.2 billion in just five years.
That’s the power of investing in early-stage companies. And UiPath’s exponential growth in just five years gives us insight into how fast this trend is moving.
Why Exponential Growth Matters
Here’s why exponential growth like what UiPath is experiencing matters to us as investors.
A simple image can illustrate…
I target technologies on the verge of exponential growth. Exponential growth sneaks up on us. It appears gradual at first. Then one day, growth hits an inflection point – that sharp elbow we see in the blue line above. Then… boom. The trend goes vertical.
And that’s where we see the chance for the biggest profits. If we can invest at the right time, then we can experience absolutely life-changing gains.
As an example, just look at NVIDIA (NVDA).
NVIDIA is a semiconductor company known today for its graphics processing units (GPUs). NVIDIA’s GPUs are used today to run AI programs, among other things. We can think of them as the “workhorse” for AI applications in data centers today.
Back in February 2016, I gave an investing presentation to a small group of wealthy investors and family offices. Back then, NVIDIA was wildly misunderstood. Wall Street was not accounting for the exponential growth we were about to see in AI applications for data centers.
I recommended making a position in NVIDIA to those investors. And I hope they took me up on the offer…
In the time since my presentation, NVDA has risen over 1,800%.
Anyone who followed my advice by putting just $5,000 into NVDA turned their investment into more than $90,000 in less than five years.
These are the kinds of returns I want to bring to you. And that’s why I work hard to find the technologies on the cusp of exponential growth…
Where to Find the Next Big Winner
Above, I talked about robotic process automation and how it uses AI. AI is also critical to NVIDIA’s success. Both robotics and artificial intelligence are tech trends I follow in my newsletter, The Bleeding Edge.
And with good reason.
A report from International Data Corporation shows that companies will spend around $50 billion developing and implementing AI and machine learning this year alone. And this spending is going to more than double over the next four years, hitting $110.7 billion annually in 2024.
And global spending on robotics and drones is expected to reach over $128 billion this year. By 2023, that number is expected to grow to $241 billion.
Tech trends like these are ripe fields for investment. When there’s this much money being put into an industry, companies can soar.
And these are just two areas of tech. I haven’t even mentioned the potential in other bleeding-edge technology advances I follow, like 5G, self-driving cars, nuclear fusion, quantum computing, and genetic editing therapies.
The world is changing faster than ever, especially after COVID-19. And that’s why technology is one of the most exciting areas to invest in.
If you want to know the best ways to invest in this rapidly changing world, I’m going to reveal those answers on Wednesday, October 21, at 8 p.m. ET. On that day, I’m hosting a special investing summit.
We’re calling it Jeff Brown: Beyond Exponential.
Readers who attend this summit will learn how everyday investors can build a million-dollar tech portfolio – from scratch – in today’s market. These are the most exciting stocks I would want to own in my own portfolio.
So be sure you mark that date on your calendar and sign up right here. I hope to see you there.
Editor, The Bleeding Edge
P.S. Above, I recounted my success in recommending NVIDIA to a group of wealthy private investors.
Now, I believe I’ve found the company that could rival NVIDIA.
I’ll give readers the name of this company for free during the investment summit. And if you haven’t already, go right here to sign up for our free VIP text alert service.