The fairytale of India's unicorns

Unicorn is a term in business world to indicate a privately held startup company valued at over $1 billion. The term was coined in 2013 by venture capitalist Aileen Lee, choosing the mythical animal to represent the statistical rarity of such successful ventures. Currently India is World's 4th largest startup ecosystem. InMobi, a mobile advertising and discovery platform provider, became India's first Unicorn in 2013. One97 Communications, the parent company of PayTM with $16-billion valuation is India's biggest unicorn as of August 2020. From a nascent ecosystem with 29 thousand tech focused ventures, the number has grown exponentially to 55 thousand startups at end of 2020. Asa comparison, China is home to 30 million startups. China has roughly 11800 incubators compared to 520 in India. Indian startups raise about 10% from India. Indian startups have raised $63 billion across 400 deals between 2014 to H12020. There are nearly 849 Venture Capital firms and 2751 Angel Investors operating in India currently. India invested $480 million in 338 startup funding. From 10 unicorns in 2016, India is now home to 34 unicorns. Out of 52 Indian soonicorns (valuation above $100 million), 19 are in Fintech, 7 in e-commerce and 7  in Consumer services. According to a new report by NASSCOM, titled ‘Indian Tech Start-up Ecosystem - Leading Tech in the 20s’, over 1,300 start-ups were added in 2019, reinforcing India’s position as a leading start-up ecosystem. More than 65 per cent share of the incubators and accelerators were added in the last five years, of which 57 per cent are active outside tier-1 cities. The start-up ecosystem of India, at a cumulative valuation of $ 95-101 billion, has created 390,000-430,000 direct jobs with over 60,000 jobs in 2019 alone. By Hurun Global Unicorn study, the valuation of Unicorns started by overseas Indians globally was $99.6 billion (around 40 unicorns). 11 Indian startup companies became Unicorn in 2018. The average valuation of Indian Unicorn is $3.2 billion, which is 3rd largest behind US ($3.5 billion) and China($3.8 billion). The number of innovation clusters with a minimum of one unicorn is just 5 in India as compared to 18 and 24 in China and USA respectively. Globally 87% unicorns are software products, 7% are hardware and rest 6% are others. 62% of Unicorns are B2C (Business-to-Consumer). To take into perspective Amazon is a B2C company whereas Amazon Web Services(AWS) is a B2B company. In Canada, Unicorns are called 'Narwhal'. 

In 2019, 8 startups such as BigBasket, Delhivery, Druva, Icertis, OLA Electric, Lenskart, Dream11 and Rivigo became unicorn. In pandemic year(2020), 11 Indian startups have become Unicorn so far. They are - RazorPay, Unacademy, Postman, Zerodha, Nykaa, Cars24, Firstcry, Zenoti, Dailyhunt, Glance and PineLabs.

When a group of investors creates a fund to invest in various businesses that are too risky for a bank to provide any loan, they are called a venture capital firm. Some of top VC firms investing in India are - SoftBank, Alibaba Group, Accel Partners, Lightspeed India, Sequoia Capital India, SAIF partners, Tiger Global management, Tencent Holdings, Temasek Holdings etc.

Bengaluru is home to 8 Unicorns, followed by Gurgaon(6) and Noida(2).

P.S. After IPO (means when a company get listed) or acquisition, a company is no more considered as a Unicorn, e.g., Flipkart is not considered as unicorn after a majority of stake is acquired by Walmart.



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