India will have over 250 unicorns by 2025, says Iron Pillar report
By 2025, India will have around 250 unicorns. Iron Pillar, a venture growth investor, made this prediction based on its unique data analysis in its Tech Unicorns Market Landscape Report IV. In 2011, InMobi became India’s first unicorn. Since then, 129 companies have been added to the list of stars, with 100 of them added in January 2019.
Entrepreneurs are growing their businesses faster, with half of the 130 companies reaching unicorn status within five years of their first institutional funding. The IPO of 12 Unicorns is another sign of the Indian IT ecosystem’s maturation.
“In the last 15 months, the number of unicorns produced from India has more than doubled, from 62 to 130,” says the report “Iron Pillar’s Managing Partner, Anand Prasanna, stated. “While we expect this rate to slow in the next 24 months, developing 250 companies worth more than $1 billion by 2025 is a very attainable objective for Indian entrepreneurs. We are especially confident because around half of these scaled enterprises are also building for markets outside of India.”
There were 58 worldwide cloud companies, 59 B2C (business to consumer) companies, and 13 B2B (business to business) enterprises founded in India. Many Indian software entrepreneurs are establishing their headquarters in the United States to serve global markets. Compared to B2C companies, companies producing cloud goods for the world from India are incredibly capital efficient, reaching unicorn status with 42% less money. They also outperform the number of exits and the value created per capital unit raised. Global cloud unicorns have fewer financing rounds on average than B2C and B2B unicorns.
According to a 2022 report on unicorns, India has overtaken the United States and China as the world’s third-largest tech market. In 2021, Indian IT startups received $42 billion in investment.
India now holds third position in the world, in terms of unicorns
According to Dr Jitendra Singh, the country is presently ranked third in the world for unicorns. Until April 5, he claimed, there were 99 unicorns in the country. Instead of waiting for startups to approach the ministry for funding, Jitendra Singh indicated in response to a question in the Lok Sabha that the government is reaching out to them and conducting a startup hunt.
Between 2014 and 2022, the government, according to Dr Singh, has funded 10600 startup initiatives. Since 2016, the ministry, he claims, has registered around 67 thousand startup projects.
He told the House that 25 technology innovation centres in advanced technologies had been established in renowned institutes around the country as part of the Mission’s implementation.
What is a unicorn?
In the venture capital market, a unicorn is a startup valued at $1 billion or more.
The term unicorn was coined by Cowboy Ventures CEO Aileen Lee, who referred to the 39 companies with a valuation of above $1 billion as unicorns. The phrase was coined to emphasize how uncommon such businesses were at the time. The definition of a unicorn startup has remained unchanged since then. Unicorns, on the other hand, have increased in number.
Features of a unicorn startup
• Disruptive innovation: Almost every unicorn has contributed significantly to their field. Like Uber changed the way people commuted. Airbnb, for example, changed the way people booked trips, while Snapchat changed the way people used social media.
• The ‘firsts’: Unicorns are known for being trailblazers in their respective fields. They gradually alter people’s behaviour and become a demand. They’re also thought to be continuing to develop in order to stay ahead of the competition.
• High-tech: Technology-based business concepts are another prevalent element among unicorns. According to new research, software makes up 87 per cent of unicorn items, hardware makes up 7%, and other products and services make up the remaining 6%.
• Consumer-oriented: B2C businesses account for 62% of unicorns. Customers expect things to be easy for them, and they want to be able to use them in their everyday lives. The low-cost structure of these firms is another distinguishing trait. Spotify, for example, has made music more accessible to people all around the world.
• Privately held: Because most unicorns are privately held, when a large corporation invests in them, their value jumps.
There are 361 private enterprises in the world worth more than $1 billion. India has 16 businesses, accounting for 4% of the global market. Furthermore, with 19 unicorns and a 5% worldwide share, India is only a hair behind the United Kingdom.
Is it true that only a startup can be a unicorn?
Yes, it is correct. A unicorn is a company having a market capitalization of more than one billion dollars. Companies with a market capitalization of more than $10 billion are known as decacorns. Dropbox, SpaceX, and WeWork are just a few of the decacorn enterprises.
In the world of Canadian startups, what we refer to as a unicorn has its own moniker. ‘Narwhal’ is the word. A narwhal is a Canadian startup firm with a market capitalization of more than $1 billion. Hootsuite and Wattpad, for example, are Narwhal firms.
List of unicorn startups in India
Flipkart: The success story of two friends, Sachin and Binny Bansal, is the success story of Flipkart, which was launched in 2007 and is now one of India’s leading e-commerce enterprises. Flipkart is far ahead of all other Indian e-commerce companies, with a market capitalization of more than $15.5 billion.
PayTM: PayTM was launched in 2010 by Vijay Shekhar and is owned by One97 Communications, which was founded in 2010 at a time when mobile phones were still relatively new to Indians. After transitioning from mobile top-up service to a bus and rail ticket booking service, a bill payment enabler, and finally a full-fledged payment service provider for enterprises, One97 Communications was renamed PayTM. PayTM current market capitalization is almost $2 billion.
Razorpay: Harshil Mathur and Shashank Kumar co-founded a Bangalore-based fintech startup that became a unicorn after receiving $100 million in Series D funding from GIC, Singapore’s sovereign wealth fund, and Sequoia Capital, as well as our existing investors Ribbit Capital, Tiger Global, Y-Combinator, and Matrix Partners. They founded the company with the intention of assisting every business in accepting digital payments, and they’ve made significant progress toward that goal.
Meesho: Meesho is a reseller platform for small and medium businesses that enables them to establish their online business using social media platforms such as Facebook, Instagram, and WhatsApp. It was started in 2015 by Sanjeev and Aatrey Barnwal. The Bangalore-based firm claims to have 100K registered suppliers providing over 26K postal codes in over 4000 towns, with individual businesses grossing more than INR 500 crore.
PharmEasy: Dhaval Shah and Dharmil Sheth created PharmEasy in 2015, and it provides a variety of services, including sample collection for diagnostic testing, teleconsultation, prescription deliveries, and more. It also enables pharmacists to bundle purchases with delivery and logistics support. PharmEasy has established relationships with more than 60K pharmacies and 4K doctors across India, covering 16K postal codes.
Cred: Kunal Shah started the Bangalore-based fintech startup in 2018, and it was just allowed into the unicorn club with a $2.2 billion valuation. CRED is a members-only organization that offers enticing discounts and access to high-quality events in exchange for prompt credit card bill payments. It’s a service that lets credit card customers manage several cards while also getting a credit report.
Urban Company: It’s a one-stop shop that connects customers with high-end service providers, including masseurs and beauticians, as well as upholstery cleaners, carpenters, and technologists. It was founded in 2014 by Abhiraj Bhal, Raghav Chandra, and Varun Khaitan. Over 5 million consumers have been served by Urban Company’s network of 40,000+ licenced service experts in major urban regions across the world.
Zeta: Zeta is a neo-banking platform that allows businesses to create unique retail and corporate products by providing credit, debit, and prepaid cards. Businesses that want automation can look to Zeta for digitized solutions.
BharatPe: Ashneer Grover and Shashvat Nakrani founded the company in 2018. BharatPe was the first company in India to provide UPI QR codes, and it has lately expanded its services to include other financial services. BharatPe is the industry leader in UPI offline transactions, with over 50 lakh merchants in 35 cities throughout India.
Mindtickle: Mindtickle is a data-driven sales readiness and enablement platform that helps companies increase revenue and brand loyalty. Mindtickle may be used by revenue and sales leaders to constantly review, diagnose, and enhance the knowledge, skills, and behaviours required to effectively engage buyers, accelerate sales, and drive growth.
The Goods and Services Tax in India has had an impact on how entrepreneurs operate today. Many indirect taxes have been repealed, and they are now consolidated under the GST umbrella. As a result, specific GST rules for startups must be followed in order for these enterprises to receive compliance relief and other benefits.
THE INDIAN UNICORN LANDSCAPE
Startup Ecosystem in India
With approximately 66,359 DPIIT-recognized firms spread over 642 districts as of March 21, 2022, India had become the world’s third-largest startup ecosystem. With top rankings in scientific publications and university quality, India ranks second among middle-income countries in terms of innovation quality. India’s inventiveness isn’t limited to just a few areas. We discovered companies working to solve challenges in 56 different areas, with IT services accounting for 13%, healthcare and life sciences for 9%, education for 7%, professional and commercial services for 5%, agriculture for 5%, and food and drinks for 5%.
In the previous few years, the Indian startup ecosystem has risen at an exponential rate: the number of investors has increased by 9X, overall startup funding has increased by 7X, and the number of incubators has increased by 7X.
In today’s fast-paced and dynamic economy, Indian unicorns are thriving. These firms employ a large number of people and create cutting-edge solutions and technologies. Until the fiscal year 2016-17, an average of one unicorn was added per year. Over the last four years (starting in FY 2017-18), the number of new unicorns created each year has gradually climbed, with a remarkable 66 per cent increase year over year. As of March 25, 2022, India has 94 unicorns with a combined valuation of $ 319.67 billion. In 2021, 44 unicorns worth $ 94.77 billion were formed, while 13 unicorns with a total valuation of $ 25.4 billion were born in 2022.
Investors in Unicorns
In Q3 2021, 23 investment transactions with ticket values equal to or greater than $ 100 million were recorded, according to a YourStory Report, illustrating the Indian startup ecosystem’s solid strength. Four of the deals were worth more than $500 million each. Sequoia Capital has been the most active investor in Indian startups, followed by Tiger Global Management, Accel, and Softbank.
Furthermore, traditional methods of fundraising have shifted, with entrepreneurs now contemplating options like crowdfunding, revenue-based financing, venture debt, and bank loans, among others. Startups like Zerodha, which has been bootstrapping since the beginning, are defying unicorn funding standards by fostering independence and revenue generation from the beginning.
Unicorn Sector Snaps
· Healthcare
After the epidemic, the Indian HealthTech industry would grow at a 39 per cent CAGR to $ 5 billion by 2023. A digital revolution, greater technology, and favourable government policies have all supported the market’s rise.
With a valuation of $ 1.3 billion, Innovaccer, a Noida-based health tech company, has become the first Indian unicorn in the healthcare sector. Healthcare professionals, hospitals, insurance companies, and other organizations and corporations can benefit from Innovaccer’s analysis of healthcare data.
With a valuation of roughly $ 1.5 billion, Pharmeasy, an online pharmacy and diagnostics company, became a unicorn earlier this year. The online pharmacy plans to go public in the near future, with an initial public offering (IPO) valuation of roughly $7 billion.
With the advent of health-tech companies like Cure.fit, Practo, HealthifyMe, and others, India’s healthcare sector is expected to experience an increase in unicorns in the near future.
· Social Commerce
Social commerce enterprises in India generated $554 million in sales in July 2021, a 7x increase from the previous year and the highest since 2015.
According to experts and investors who see the sector as an extension of e-commerce, social commerce has opened up tier 2 and tier 3 markets and allowed large e-commerce platforms to reach low-margin categories in fast-moving consumer goods and groceries, which has helped boost the overall e-commerce industry.
With a valuation of $ 2.1 billion, Meesho, a Facebook-backed social commerce company, has become the first Indian social commerce firm to join the unicorn club. Meesho is a social media reseller network for individuals and small and medium businesses (SMBs) who sell products to other network members via platforms including WhatsApp, Facebook, and Instagram. It has around 13 million individual entrepreneurs who provide eCommerce benefits to 45 million customers across India.
Meesho claims to have delivered orders from over 100K suppliers to over 26K pin codes over 4,800 cities, with individual firms earning over INR 500 crore.
The social commerce sector in India is quickly growing, with startups like SimSim, Dealshare, CityMall, and Bulbul vying for customers’ and investors’ attention.
India has Created a Unicorn Every Five Days in 2022 So Far, Says Piyush Goyal
In the first 40 days of 2022, eight new Indian companies have joined the list of Unicorns, kicking out the year on a strong note. A corporation having a market capitalization of $1 billion or more is known as a unicorn. According to Piyush Goyal on Twitter, India has so far produced a unicorn every five days in the year 2022. Polygon, a blockchain technology company, and ElasticRun, a B2B e-commerce company, are two of the newest Unicorn members.
Goyal called for the establishment of 75 new unicorns by the end of 2022 during the inaugural event of the Indian Startup India Innovation Week earlier this month. Corporations are expected to add 75 new unicorns in 2022, according to the minister, with half of the total 83 unicorns valued at $1 billion in 2021 alone.
Goyal commended new-age entrepreneurs, claiming that while the rest of the world was dealing with the COVID-19 pandemic, Indian enterprises had shown remarkable growth and turned hardship into opportunity.
India is becoming a global unicorn hub. Here’s why
In the year 2020, a slew of unicorns arose. In recent years, 11 unicorns have been discovered, with the first one emerging in 2021. The current total is 37, which is up 33% from the previous year!
India has the world’s third-largest startup ecosystem and, without a doubt, the fastest-growing. These enterprises have grown at an exponential rate, not as a result of the epidemic but as a result of it. They took advantage of changing consumer habits and quickly adjusted/swivelled to fulfil the needs of their customers. In order to expand, these companies emphasized the need of focusing on the market and the client. They also obtained investment from well-known Indian and international investors. Each of these companies has successfully raised funds and delivering value to its investors.
Without a surprise, India is the centre of the global spotlight. Large, diverse markets, technological innovation, revolutionary proposals, and very high-quality individuals are just a few of the factors that contribute to the startup success story. To make quick investments, the worldwide investor community pays close attention to the country and its businesses. In the five years since 2015, India has attracted $250 billion in foreign direct investment. Almost 75% of total FDI, or $184 billion, has come from venture capital and private equity, which invests in unlisted startups and growing enterprises, resulting in the creation of unicorns.
India has an interesting history of invention and fast-growing firms in a variety of areas. Indian unicorns have emerged in fields such as education, beauty, retail, fintech, e-commerce, mobility, salon and spa management software, healthcare, grocery, insurance, food tech, analytics, mobile ads, and others. With numerous business models such as B2B, B2C, and B2B2C, these companies cater to both enterprises and consumers.
India has produced three decacorns and 37 unicorns, which have led the way. Still, revolutionary enterprises that solve global problems and scale globally have only lately begun to emerge in the country. Unicorns are expected to emerge faster in the ecosystem from various industries and locations around the country, including tier 2 and tier 3 cities.
A unicorn has been bred into two other unicorns in the Indian ecosystem.
In the Indian ecosystem, a unicorn has been bred into two more unicorns. This is unusual in that it not only helps entrepreneurs build profitable firms, but it also demonstrates the value created for investors. Decacorns, worth $10 billion, is now being seen in India! There are currently three decacorns in India, with more on the way!
Due to the lockdown and social isolation, several firms were pushed to shift from old methods to digitally-driven operations, generating more good channels for market forces. Several firms leveraged cutting-edge technology to fill holes in the industry, including artificial intelligence, the internet of things, data analytics, big data, robotics, and others. They also capitalized on consumer/customer needs for digital, which aided company expansion.
Without a question, India is the centre of the world’s attention. Large, diverse markets, technology innovation, revolutionary proposals, and exceptionally high-quality personnel are all factors in the startup growth story. To make quick investments, the worldwide investor community pays close attention to the country and its enterprises. In the five years since 2015, India has attracted $250 billion in foreign direct investment. Almost seventy-five per cent of total FDI, or $184 billion, has come from venture capital and private equity funds, which invest in unlisted startups and growing enterprises, resulting in the creation of unicorns.
India will have a unicorn club of 50 or more by 2021 and a unicorn club of 100 by 2025, according to a joint analysis by Nasscom and Zinnov. This is a fairly achievable aim. Many’ soonicorns,’ or unicorns, are on their way to the country. We won’t be surprised if India achieves its unicorn goal of 100 by 2025! These will, predictably, emerge from industries that have yet to be addressed, such as agritech, health tech, cleantech, etc.
In response to Prime Minister’s demand for ‘Atmanirbhar Bharat,’ these companies develop solutions for India. They are, however, solutions for the entire world since they have gone global. To address the world’s real concerns, they’ve developed best-in-class solutions and formed multi-national businesses.
Because their founders are conscious of their responsibility to investors, employees, and stakeholders, these businesses that have produced value are now looking ahead. They understand how critical it is to provide opportunities for investors, employees, and other stakeholders to prosper. Interestingly, VC/PE funds, which are the funders of the startup ecosystem, backed 60% of Indian companies that went public in the last five years.
VC/PE-backed firms, led by the decacorns, unicorns, and soonicorns, have created 1.3 times more jobs and paid nearly twice as much tax than non-funded firms. The startup business clearly creates enormous riches for its founders, employees, and investors, thanks to its angel investors, venture capitalists, and private equity firms.
India has produced three decacorns and 37 unicorns, which have led the way. Still, revolutionary enterprises that solve global problems and scale globally have only lately begun to emerge in the country. Unicorns are predicted to emerge from a variety of industries and places across the country, including tier 2 and tier 3 cities, at a quicker rate in the ecosystem.
The Indian unicorn will not be a rare animal. That is no longer the case. There will be a lot more of them, and they will be in herds.
Next Stage: Going Beyond the Unicorn
As the world increasingly recognizes the potential of startups, the global startup ecosystem is changing. We’re gradually transitioning from the unicorn period to the decacorn era.
A decacorn is a company with a market capitalization of $10 billion or more.
The decacorn classification has been awarded to 46 companies from all around the world as of January 2022. Flipkart, BYJU’s, Paytm, and Swiggy are the four Indian startups in the decacorn cohort.
