India is now number three in the world in terms of unicorns; 99 unicorns registered so far in the country

India is now number three in the world in terms of unicorns; 99 unicorns registered so far in the country

Dr Jitendra Singh, Minister of Science and Technology, stated that the country is currently ranked third in the world for unicorns. He said that there were 99 unicorns in the country until April 5. In response to a question in the Lok Sabha, Jitendra Singh stated that instead of waiting for start-ups to approach the ministry for funding, the government is reaching out to them and conducting a start-up search.

According to Dr Singh, the government has financed 10600 start-up initiatives between 2014 and 2022. According to him, the ministry has registered roughly 67 thousand start-up projects since 2016.

He told the House that, as part of the Mission’s implementation, 25 technology innovation centres in sophisticated technologies had been established in reputable institutes around the country.

What is a unicorn?

A unicorn is a startup valued at $1 billion or more in the venture capital industry.

When Cowboy Ventures CEO Aileen Lee referred to the 39 companies with a valuation of over $1 billion as unicorns, she coined the name. The phrase was coined to emphasise the rarity of such companies at the time. Since then, there has been no change in the definition of a unicorn startup. On the other side, the number of unicorns has grown.

Features of a unicorn startup

• Disruptive innovation: Almost every unicorn has made a significant contribution to their profession. Like, Uber revolutionised the way people commuted. Among other things, Airbnb transformed the way people booked vacations, and Snapchat revolutionised the way people used social media.

• The ‘firsts’: Unicorns are typically regarded as trailblazers in their respective industries. They change people’s behaviour and gradually become a requirement. They are also considered as continuing to innovate to remain ahead of potential competitors.

• High-tech: Another common theme among unicorns is that their business models are technology-based. According to new data, software accounts for 87% of unicorn items, hardware accounts for 7%, and other products and services account for the remaining 6%.

• Consumer-oriented: 62% of unicorns are B2C enterprises. Customers expect things to be simple for them, and they want to be able to incorporate them into their daily life. Another defining feature of these businesses is their low-cost structure. For example, Spotify has made music more accessible to individuals all around the world.

• Privately owned: Because most unicorns are privately held, when a large firm invests in them, their value rises.

According to CB Insights, there are 361 private businesses worth over $1 billion in the world. India has 16 companies, which account for 4% of the global market. Furthermore, India is only a hair behind the United Kingdom, which has 19 unicorns and a 5% global share.

Is it true that only a startup can be a unicorn?

Yes, it’s right. A unicorn is a startup with a valuation of over a billion dollars. Decacorns are companies with a market capitalisation of greater than $10 billion. The decacorn companies include Dropbox, SpaceX, and WeWork, to name a few.

There is an exclusive name for what we refer to as a unicorn among Canadian startups. The word is ‘narwhal.’ Any Canadian startup company valued at more than $1 billion is referred to as a narwhal. Narwhal companies include Hootsuite and Wattpad, for example.

List of unicorn startups in India

Flipkart: Flipkart, founded in 2007 and is now one of India’s top e-commerce firms, is the success story of two friends, Sachin and Binny Bansal. With a valuation of more than $15.5 billion, Flipkart is far ahead of all other e-commerce firms in India. 

PayTM: PayTM was founded in 2010 by Vijay Shekhar and is owned by One97 Communications, which was founded in 2010 when mobile phones had only recently entered the lives of Indians. One97 Communications was renamed PayTM after it transitioned from mobile top-up service to a bus and rail ticket booking service, a bill payment enabler, and finally to a full-fledged payment service provider for businesses. With a current market capitalisation of about $2 billion, PayTM has gone a long way.

Razorpay: Harshil Mathur and Shashank Kumar co-founded a Bangalore-based fintech startup that recently received $100 million in Series D funding from GIC, Singapore’s sovereign wealth fund, and Sequoia Capital and our existing investors Ribbit Capital, Tiger Global, Y-Combinator, and Matrix Partners, and became a unicorn. They started the firm with the primary purpose of supporting every business in accepting digital payments, and they’ve made substantial progress toward that goal over time.

Meesho: Meesho is a reselling platform for small and medium enterprises that allows them to launch their online venture through social media channels, including Facebook, Instagram, and WhatsApp. Sanjeev and Aatrey Barnwal founded it in 2015. The Bangalore-based company claims to have 100K registered suppliers supplying over 26K postal codes in over 4000 cities, with individual enterprises making over INR 500 crore in sales. 

PharmEasy: PharmEasy was founded in 2015 by Dhaval Shah and Dharmil Sheth and offers a variety of services, including sample collection for diagnostic testing, teleconsultation, prescription deliveries, and more. It also allows pharmacists to combine the purchase with delivery and logistics assistance. PharmEasy has built ties with over 60K pharmacies and 4K doctors across India, encompassing 16K postal codes.

Cred: The Bangalore-based fintech company was founded by Kunal Shah in 2018 and was just accepted into the unicorn club with a $2.2 billion valuation. CRED is a members-only organisation that rewards timely credit card bill payments with attractive discounts and access to high-quality events. It’s a service that allows credit card users to manage several cards while also receiving a credit score analysis.

Urban Company: It is an all-in-one platform that connects consumers with premium service specialists such as masseurs and beauticians, as well as sofa cleaners, carpenters, and technologists. Abhiraj Bhal, Raghav Chandra, and Varun Khaitan launched it in 2014. Urban Company’s network of 40,000+ licenced service experts in major urban areas around the world has assisted over 5 million customers.

Zeta: Ramki Gaddipati and Bhavin Turakhia started Zeta in 2015, and it became a unicorn in 2021 after obtaining $250 million in its Series C investment round. By providing credit, debit, and prepaid cards, Zeta is a neo-banking platform that allows firms to create unique retail and corporate products. Businesses in need of automation can also turn to Zeta for digitised solutions.

BharatPe: Founded in 2018 by Ashneer Grover and Shashvat Nakrani. BharatPe was India’s first UPI QR code supplier, and it has recently expanded its offerings to include other financial services. With over 50 lakh merchants in 35 cities throughout India, BharatPe is the market leader in UPI offline transactions.

Mindtickle: Mindtickle is a data-driven sales preparedness and enablement solution that boosts revenue and brand loyalty. Revenue and sales leaders may use Mindtickle to constantly assess, diagnose, and build the knowledge, skills, and behaviours necessary to engage buyers, accelerate sales, and drive growth effectively.

The Goods and Services Tax implemented in India has impacted how start-ups function today. Many indirect taxes have been eliminated and are now grouped together under the GST umbrella. As a result, particular GST requirements for startups must be obeyed to provide compliance relief and other benefits to such businesses. 

THE INDIAN UNICORN LANDSCAPE

Startup Ecosystem in India

As of March 21, 2022, India had become the world’s third-largest startup ecosystem, with over 66,359 DPIIT-recognized startups spread throughout 642 districts. India ranks second among middle-income countries in terms of innovation quality, with top rankings in scientific publications and university quality. India’s innovation extends beyond a few industries. We found startups solving problems in 56 different industries, with IT services accounting for 13 per cent, healthcare and life sciences for 9 per cent, education for 7 per cent, professional and commercial services for 5 per cent, agriculture for 5 per cent, food and beverages for 5 per cent.

In the last few years, the Indian startup ecosystem has grown at an exponential rate:

There has been a 9X growth in the number of investors, a 7X increase in overall startup investment, and a 7X increase in the number of incubators.

Indian unicorns are thriving in today’s fast-paced and dynamic economy. These companies employ a large number of people and develop cutting-edge solutions and technologies. Until the fiscal year 2016-17, one unicorn was added per year on average. The number of new unicorns created each year has been steadily increasing over the last four years (beginning in FY 2017-18), with a staggering 66% growth year over year. India has 94 unicorns with a combined valuation of $ 319.67 billion as of March 25, 2022. 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

According to a YourStory Report, 23 investment agreements with ticket sizes equal to or greater than $ 100 million were recorded in Q3 2021, demonstrating the robust strength of the Indian startup ecosystem. Four of the transactions totalled more than $500 million. The most active investor in Indian unicorns has been Sequoia Capital, followed by Tiger Global Management, Accel, and Softbank.

Furthermore, there has been a shift in the traditional means of fundraising, with entrepreneurs now considering alternatives such as crowdfunding, revenue-based financing, venture debt, bank loans, etc. Startups like Zerodha, who have been bootstrapping since the beginning, are challenging unicorn funding conventions and encouraging independence and income generation from the start. Since the start of COVID-19, an unusual trend has emerged: new unicorn club members without a billion-dollar ticket size investment.

Unicorn Sector Snaps 

• Healthcare

After the epidemic, the Indian HealthTech market will reach $ 5 billion by 2023, with a CAGR of 39%. The market’s growth is aided by a digital revolution, better technology, and favourable government policies.

Innovaccer, a Noida-based health tech business, has become the first Indian unicorn in the healthcare sector, with a valuation of $ 1.3 billion. Innovaccer analyses healthcare data to provide healthcare professionals, hospitals, insurance companies, and other organisations and enterprises relevant insights.

Pharmeasy, an online pharmacy and diagnostics company, became a unicorn earlier this year, with a valuation of around $ 1.5 billion. The internet pharmacy plans to go public soon, with an IPO valuation of about $ 7 billion.

With the emergence of health-tech businesses such as Cure.fit, Practo, HealthifyMe, and others, India’s healthcare sector will soon see an increase in unicorns.

• Social Commerce

As of July 2021, social commerce businesses in India had produced $554 million in sales, a 7x growth from the previous year and the largest since 2015.

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, according to experts and investors who see the sector as an extension of e-commerce.

Meesho, a Facebook-backed social commerce business, has become the first Indian social commerce startup to enter the unicorn club, valuing $ 2.1 billion. Meesho is an online reseller network for people and small and medium enterprises (SMBs) who sell products to other network members via social media platforms such as WhatsApp, Facebook, and Instagram. It has almost 13 million individual entrepreneurs, delivering the benefits of eCommerce to 45 million clients across India.

Meesho claims to have delivered orders from over 100K registered suppliers to over 26K pin codes over 4,800 cities, producing over INR 500 crore ($68 million at today’s exchange rate) in revenue for individual entrepreneurs.

In India, the social commerce sector is rapidly expanding, with companies such as SimSim, GlowRoad, Dealshare, CityMall, and Bulbul vying for attention from both customers and investors.

India has Created a Unicorn Every Five Days in 2022 So Far, Says Piyush Goyal

Eight new Indian firms have made it to the list of Unicorns in the first 40 days of 2022, kicking off the year on a positive note. A unicorn company is one with a market capitalisation of $1 billion or more. Piyush Goyal said on Twitter that India has so far developed a unicorn every five days in the year 2022. Companies like Polygon, which specialises in blockchain technology, and ElasticRun, a B2B e-commerce startup, are the newest members of the Unicorn club.

Goyal urged to create 75 new unicorns by the end of 2022 while addressing at the opening event of the Indian Startup India Innovation Week earlier this month. The minister stated that corporations expect to add 75 new unicorns in 2022, noting that half of the total 83 unicorns have attained $1 billion values in 2021 alone.

Goyal praised new-age entrepreneurs, saying that when the globe was grappling with the COVID-19 pandemic, Indian businesses had demonstrated remarkable development and transformed adversity into opportunity.

India is becoming a global unicorn hub. Here’s why

A spate of unicorns appeared in the year 2020. 11 unicorns have been discovered in recent years, with the first one appearing in 2021. The current total is 37, representing a 33% increase over 2019! 

India has the third-largest startup ecosystem globally, and it is unquestionably the fastest growing. These businesses have developed exponentially, not because of the epidemic but because of it. They took advantage of shifting consumer behaviour and promptly adjusted/swivelled to meet the customers’ needs. These businesses emphasised the importance of focusing on the market and the client to grow. And they received funding from well-known investors in India and around the world. Each of these businesses has raised money and provided value to its investors.

India is, without a doubt, the world’s centre of attention. Several variables contribute to the startup growth story, including large, diverse markets, technological innovation, disruptive proposals, and extraordinarily high-quality people. The international investor community pays close attention to the country and its businesses to make swift investments. India has received $250 billion in foreign direct investment in the last five years, starting in 2015. Almost 75% of the total FDI, or $184 billion, has come through venture capital and private equity finance, which invests in an unlisted startups, and growth companies, resulting in the development of unicorns.

Intriguingly, India has experienced innovation and fast-growing businesses in various industries. Education, beauty, delivery, retail, fintech, e-commerce, mobility, salon and spa management software, healthcare, trucking services, grocery, insurance, food tech, analytics, mobile ads, and other areas have produced Indian unicorns. And these businesses cater to both businesses and consumers, with various business models such as B2B, B2C, and B2B2C.

The three decacorns and 37 unicorns that India has produced have led the way. Still, the country has only recently begun to see the emergence of disruptive companies that are solving global problems and scaling globally. Unicorns are expected to emerge faster in the ecosystem from a variety of industries and locations around the country, including tier 2 and tier 3 cities.

A unicorn has bred into two other unicorns in the Indian ecosystem. This is unique in that it assists founders in creating profitable businesses, but it also shows the value made for investors. India is now seeing decacorns, which are worth $10 billion! India is now home to three decacorns, with more on the way!

Several businesses were pushed to change from traditional techniques to digitally-driven operations due to the lockdown and social isolation, creating more excellent avenues for market forces. Several startups used new-age technology such as artificial intelligence, the internet of things, data analytics, big data, robotics, and others to bridge wide-ranging gaps in the market. They also took advantage of consumer/customer desire for digital, which helped them speed their expansion.

India is, without a doubt, the world’s centre of attention. Several variables contribute to the startup growth story, including large, diverse markets, technological innovation, disruptive proposals, and extraordinarily high-quality people. The international investor community pays close attention to the country and its businesses to make swift investments. India has received $250 billion in foreign direct investment in the last five years, starting in 2015. Almost 75% of the total FDI, or $184 billion, has come through venture capital and private equity finance, which invests in an unlisted startups, and growth companies, resulting in the development of unicorns.

According to a joint analysis by Nasscom and Zinnov, India will have a unicorn club of 50 or more by 2021 and a unicorn club of 100 by 2025. This is a very realistic goal. The country now has many ‘soonicorns,’ or unicorns, on the way. We won’t be astonished if India surpasses the goal of 100 unicorns by 2025! Unsurprisingly, these will arise from industries that have yet to be addressed, such as agritech, health tech, cleantech, etc.

These businesses create solutions for India in response to Prime Minister Narendra Modi’s demand for ‘Atmanirbhar Bharat.’ However, because they have gone worldwide, these are also solutions for the entire world. They’ve created best-in-class solutions and grown multi-national enterprises to address the world’s actual challenges.

These businesses that have created value are now looking ahead, as their founders are aware of their obligations to investors, employees, and stakeholders. They recognise the importance of creating exit possibilities for investors, employees, and other stakeholders to profit. Interestingly, 60 per cent of Indian companies that went public in the last five years were funded by VC/PE funds, which are the funders of the startup ecosystem.

VC/PE backed firms have created 1.3 times more employment and paid nearly twice as much tax than non-funded companies, led by the decacorns, unicorns, and soonicorns. With its angel investors, venture capitalists, and private equity firms, the startup business clearly creates extreme wealth for its founders, employees, and investors.

The three decacorns and 37 unicorns that India has produced have led the way. Still, the country has only recently begun to see the emergence of disruptive companies that are solving global problems and scaling globally. Unicorns are expected to emerge faster in the ecosystem from a variety of industries and locations around the country, including tier 2 and tier 3 cities.

The Indian unicorn will not be an uncommon creature. Not any longer. We’ll see a lot more of them and in herds.

Next Stage: Going Beyond the Unicorn 

The global startup ecosystem is transforming as the world increasingly recognises the potential of startups. We’re progressively moving away from the unicorn era and toward the decacorn era.

A decacorn is a firm with a market capitalisation of greater than $10 billion.

As of January 2022, 46 firms from all over the world have been awarded the decacorn classification. India has four startups in the decacorn cohort: Flipkart, BYJU’s, Paytm, and Swiggy.

edited and proofread by nikita sharma