In September of 2019, reality TV star Kim Kardashian West launched an underwear startup called SKIMS.
Today, less than two years later, the company is worth $1.6 billion.
Uh, what? How is a 2-year-old underwear company worth more than $1 billion? And more importantly, how can you use the answer to that question to make a fortune for yourself?
That’s what I’ll cover today.
$145 Million of Underwear
SKIMS is creating what it calls the next generation of underwear, loungewear, and shapewear.
Its shapewear, for example, “enhances a body’s curves,” and its underwear can stretch to twice its normal size.
And as it turns out, those attributes — in conjunction with Kardashian’s star-power — have been able to attract significant sales. According to The New York Times, the company brought in $145 million in 2020 sales, and it expects that figure to double in 2021.
Those are some big numbers for a young startup.
But in today’s world, they’re becoming more and more common...
Three Reasons a Startup Can Become So Valuable So Quickly
To simplify things a bit, there are three main reasons a startup can quickly become so successful nowadays — and so valuable:
- Because of the internet, new trends can travel across the globe at the speed of light.
- By leveraging social networks like Instagram, a company can build its brand quickly. Kardashian, for example, has about 210 million followers (!) on Instagram that track her every move. That’s a massive audience she can advertise to, for free.
- As investors have discovered the market-beating returns of startups, they’re more willing to invest large sums of capital on potential “winners” at their earliest stage. The thing is, not only does this vast capital help startups grow faster, but it also dramatically boosts a company’s valuation: essentially, if a startup raises hundreds of millions of dollars, that can push its valuation to $1 billion or more. In the case of SKIMS, for example, the company has already raised $154 million — and that funding pushed its valuation to $1.6 billion.
There Are 746 Billion-Dollar Startups
Those three reasons help explain why SKIMS has plenty of company today in the billion-dollar startup club.
Have you heard the term “unicorn”? A unicorn is a private startup worth at least $1 billion.
A billion-dollar startup used to be so rare that it might as well have been a mythological unicorn. But today, because of the reasons I mentioned above, there are hundreds of them.
In fact, according to research company CB Insights, currently there are 746 of them. Furthermore, in Q2 of 2021, 136 new unicorns were created! Check it out:
Maximize Your Returns
So now you know: startups are hitting billion-dollar valuations in record time.
The thing is, by getting into these companies early — before they become billion-dollar unicorns, and well before they go public in an IPO — you can potentially make a fortune.
For example, if you invest in a startup when it’s worth, say, $10 million…
And you sell it when its worth $1.6 billion, like SKIMS…
You could potentially make about 160x times your money.
That’s enough to turn a $5k investment into $800,000.
Get Started Today
Ready to do some startup investing yourself?
Here are three easy ways to get started:
First, check out our weekly “Deals” email. We send this out every Monday at 11am EST, and it contains a handful of new startup deals for you to explore.
Second, check out our free white papers like “Tips from the Pros.” These easy-to-read reports will teach you how to separate the good deals from the bad.
And third, if you’d like to accelerate your success in startup investing, consider signing up for our online course, The Early-Stage Playbook, or for one of our premium research services like Private Market Profits.
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