01 May 2025
- Unicorns chase hyper-growth; zebras focus on sustainable profit and purpose.
- Boxfund backs zebra companies solving real problems with ethical models.
- Zebras prioritize long-term resilience over flashy valuations.
- Purpose-led zebras attract loyal customers, employees, and investors.
The Unicorn Myth and Its Limitations
In venture capital lore, a “unicorn” is a start-up that achieves a valuation over $1 billion, a rare creature indeed. For years, the pursuit of unicorn status has dominated the start-up narrative, especially in Silicon Valley. Founders and investors often fixate on blitz-scaling growth, raising ever-larger funding rounds, and capturing market share at all costs to join the unicorn club. However, this high-stakes approach has significant downsides. Chasing exponential growth “at any cost” can lead companies to sacrifice sustainable business fundamentals and even ethics (linkedin.com). We’ve seen high-profile examples of unicorns that soared on valuations only to falter because their economics were flawed or their practices questionable (think of cases like WeWork’s implosion or Theranos). The singular focus on hyper-growth can mask underlying problems, unit economics that don’t make sense, corporate cultures that burn out employees, or products that don’t truly solve a real need.
The UK early-stage ecosystem has its own share of this unicorn fever, ambitious founders dreaming of becoming “the next Revolut or Monzo,” and investors seeking 100x returns. But an alternative model is gaining traction, the “zebra” start-up. Coined as a response to unicorn hype, zebra companies are focused on sustainable growth, profitability, and real-world impact. Unlike mythical unicorns, zebras are real animals, an apt metaphor for companies grounded in reality. As one description puts it, “Zebra companies are both black and white, they are profitable and improve society” (medium.com). They seek the balance between profit and purpose, rather than sacrificing one for the other (linkedin.com).
What Does “Zebra” Mean? Profit and Purpose
A zebra company is typically characterized by:
Sustainable Growth: Zebras grow at a realistic pace, in line with revenues and market demand, rather than growth fueled solely by large cash infusions. The goal is to build a business that can stand on its own financially, not just one that burns investor money to inflate metrics.
Profitability and Resilience: Zebra founders aim to reach profitability sooner rather than later, and prioritize resilience in their business models. This means they focus on solid unit economics and prudent spending. They may forego some short-term hypergrowth in exchange for long-term viability.
Real-world Problem Solving: Zebras often tackle practical, meaningful problems, they are mission-driven. Their success is measured not only in revenue, but in positive impact (social, environmental, or community). They prove that you can do well by doing good.
Controlled Ownership: Rather than diluting heavily through numerous funding rounds (as many unicorn aspirants do), zebra entrepreneurs often retain more control. They might choose angel investors, revenue-based financing, or funds aligned with their ethos over the highest-valuation term sheet. This ensures they can stick to their mission without pressure to chase unsustainable growth.
Boxfund has embraced this zebra mentality wholeheartedly. “At Boxfund VC we invest in Zebras, not Unicorns,” says Roger Wade (linkedin.com). The team explicitly looks for start-ups that strive for that perfect balance between profit and purpose. These are ventures aiming to be sustainable, profitable businesses that positively impact society, without compromising one for the other (linkedin.com). In other words, Boxfund isn’t interested in start-ups that achieve viral growth but have no clear path to profitability or no regard for their social footprint. They’d rather back a company with a solid, ethical business that could be steadily profitable (even if it never becomes a media-darling unicorn) than a flashy rocketship that might burn up on re-entry.
This philosophy is encapsulated in what some call the “Zebra movement,” a growing trend in the start-up world that questions the Silicon Valley mantra of growth-at-all-costs. Zebras Unite, for instance, is a founder-led movement advocating for more ethical, inclusive funding models for startups, highlighting that not every great company needs to be a unicorn. The movement’s core argument resonates with Boxfund’s view, if unicorns symbolize extreme valuations, zebras symbolize companies that are real, rare, and valuable to their communities.
Boxfund’s “Zebra” Investment Approach
Boxfund operationalizes the zebra thesis through its investment choices and how it supports companies after investing. Firstly, the sectors it focuses on are telling, consumer brand businesses that align with social good, healthy planet, and positive practices (boxfund.co.uk). This naturally filters for purposeful companies, for example, Boxfund has invested in a start-up making plastic-free, plant-based chewing gum to reduce plastic waste (a very zebra-like venture addressing an environmental issue). Another portfolio company offers healthier food options (like sugar-free baked beans) to tackle nutrition challenges (evelyn.com). These are not the kind of start-ups chasing a trendy fad just to get a high valuation, they are solving concrete problems in sustainable ways.
Secondly, Boxfund often employs a deal-by-deal investment model, taking substantial positions and active roles in governance for the companies it backs (linkedin.com). Unlike a passive VC that spreads small bets across dozens of companies hoping one hits unicorn status, Boxfund’s approach is more concentrated. They roll up their sleeves with each investment, providing strategic guidance, opening up networks, and ensuring good governance. By being deeply involved, Boxfund can help steer companies toward steady growth and long-term health, rather than pushing for risky exponential growth. This hands-on partnership is aligned with zebra thinking, it’s about building real businesses brick by brick. Boxfund isn’t waiting on a moonshot, they’re helping construct robust foundations.
Another aspect of Boxfund’s differentiation is profit with purpose or what one might call “patient capital.” As a deal-by-deal investor often leveraging angel investors and entrepreneurs’ capital (through SEIS/EIS schemes, which we discuss in another post), Boxfund isn’t bound to a typical 5-7 year fund cycle that pressures many VCs to seek quick exits. They can afford to be patient and let companies grow the right way. Boxfund explicitly states it seeks companies that aim to “achieve profitability while making a positive impact on society” (boxfund.co.uk) - a perfect summary of the zebra ethos. The firm’s own DNA (founded by a seasoned entrepreneur with a 30-year track record) means they empathize with founders who choose sustainable paths. There’s no insistence on “grow 300% year-on-year or else”; instead, the mantra is steady growth and impact.
Why Sustainable Start-ups Win in the Long Run
Choosing zebras over unicorns is not just a moral stance, it’s increasingly an economically savvy one. There’s a growing body of evidence that purpose-led companies can outperform. Consumers are driving this shift, they are more informed and concerned about how businesses operate. For instance, more than 80% of customers say that a poor environmental track record would make them abandon a brand (uswitch.com). People are voting with their wallets for sustainability and ethics. This means start-ups that embed ESG (Environmental, Social, Governance) principles have a competitive edge in customer acquisition and loyalty. Additionally, purpose-driven brands often attract highly motivated employees and engender strong community support, which are assets that translate to resilience and innovation.
From an investor’s perspective, the numbers also support sustainability. Unilever reported that its “Sustainable Living” brands (purpose-led products) were growing 69% faster than the rest of the business and contributed 75% of its growth (unilever.com). And a Deloitte study found purpose-driven companies grow 3x faster on average than their competitors while also achieving higher customer and employee satisfaction (www2.deloitte.com). The takeaway is clear, doing good can directly correlate with doing well. Companies that balance profit and purpose often tap into unmet market needs (creating new opportunities), avoid backlash or scandals that can derail a business, and build deep loyalty that money can’t buy.
Zebra companies also tend to be more resilient in downturns. Because they are built on sound business fundamentals, they can withstand economic turbulence better than cash-burning unicorns. In uncertain times, investors may actually find that their zebra investments - profitable or on a clear path to it - are safer harbours than some highly-leveraged unicorns whose fortunes might reverse abruptly.
The Future Belongs to the Zebras
As the UK ecosystem matures, expect to see more emphasis on sustainable start-up growth. Zebras are not anti-growth, they are about better growth. Boxfund is pioneering this approach in the early-stage arena by proving that backing sensible, ethical businesses can yield great returns and lasting companies. For founders, embracing the zebra mindset means you build your company to last, not just to inflate. It means prioritising customers, employees, and impact from day one, which ultimately creates a strong brand and stable revenue. It might take a bit longer to scale, but when you do, your foundation is solid.
For investors, the zebra thesis is a reminder to align investments with values and long-term thinking. It’s notable that even investors are pushing companies on ESG now, “Nearly a third of all investments now is made in ESG. It’s the fastest growing sector in investment,” notes Roger Wade (madfestlondon.com). There is ample capital looking for startups that do good while doing well. By supporting these, investors can achieve “profit with purpose,” contributing to positive change and still aiming for healthy returns (even if those returns come from multiple moderate exits rather than one unicorn IPO).
In summary, zebras fix what unicorns break. They prove that you don’t need to be mythical to be successful, you can be grounded, real, and just as impactful. Boxfund’s zebra-over-unicorn thesis is more than a differentiator, it’s part of a broader shift towards a more sustainable and responsible startup ecosystem. And given the choice, many founders are finding the zebra path not only more fulfilling but ultimately more rewarding.