Zomato- a food delivery partner, has become a verb these days in India, and so is Uber – an American mobility service company around the globe. For any brand in the market to become a household name.
Not every startup can grab growth by the horn. It takes a valiant and accomplished team to establish a company. However, an elite group of startups, like Zomato and Uber, have successfully managed to navigate the challenges of the competitive world and become a billion-dollar organisation gradually known as the ‘UNICORNS’.
What’s a Unicorn?
Alleen Lee, the founder of Cowboy Ventures and capital investor, coined the term – ‘Unicorn startups’ in 2013. The term refers to a private company valued at or over one billion dollars because, just like the chimerical creature, the statistical variance of such a successful business venture is debatable but not impossible.
When Lee did her counts back in 2013, the numbers were not impressive. There were only 39 startups with unicorn status, a mad rush to 2020. Seven years later, a new unicorn was born every three days. The world of venture capital is booming with more than 600 startups that can proudly be called unicorns and are valued at two trillion dollars when summed up. This mystical herd only continues to grow year after year.
Startups and Their Unicorn Status
Becoming a unicorn is the desire of any new venture. Still, to become one, the startup has to look over a series of factors, including geographical placements, industry breakdown, consumer requirements, understanding of how the market works, and most importantly, the uniqueness of the services/products. When all these factors are in place, it’s nearly impossible to pull down the venture from becoming a unicorn.
Initially, the requirement for any venture to get the horn was limited. However, as the clique opened globally, there has been an asynchronous expansion of startups worldwide to achieve the status of the unicorn. China holds the maximum number of unicorns, followed by the United States and India.
Pandemic Prone Year-2020
The year 2020 was devastating for the economy, people’s lives, and livelihood, but it was groundbreaking for the emergence of unicorns. Approximately 66 new ventures joined the club, all with different valuations. The new unicorns represented various sectors, including fashion, food, biotech, informatics, software, payment apps, delivery partners, etc.
Most unicorns will not cross the billion mark overnight. They need time, energy, resources, and passion for getting that horn, but some ventures quickly work hard to achieve this threshold.
A Start Up’s Journey
Every startup has ups and downs in the journey of becoming a unicorn. The maximum and minimum time taken ideally by any venture being a unicorn is 37 years and 6 months. Bangalore-based fashion brand Mensa brands took only 6 months to get the status of the unicorn. They achieved success in 2021, making it one of the fastest ventures to get this horn in Asia.
The total number of unicorns that emerged in the fiscal year(FY) of 2021 was 44, with a total valuation of around 100 billion dollars. Bangalore, Delhi, and Mumbai remain among the top cities to house the headquarters of unicorns. The unconventional sectors and sub-sectors marked an entry into the unicorn space, including NBFCs, conversational messaging, cryptocurrency exchange, D2c, cloud kitchens, and many others.
The Horns in India
India is one such country that has achieved this threshold quickly, especially over the last few years, and emerged as the 3rd largest ecosystem for startups around the globe. The Indian startup ecosystem is limited to a specific sector and has expanded to several sectors like agriculture, life sciences, education, healthcare, etc.
Indian unicorns are flourishing in the fast-paced and dynamic economy of today. The ventures growing in India are not developing innovative solutions and technology but are also generating large-scale employment.
Until 2016-17, approximately one unicorn was added each year. Since 2017-18(FY), there has been an exponential growth of unicorns with a whopping 66% year to year growth in the addition of new ventures that grew to become unicorns. As of February 9th, 2022, 88 unicorns are indigenous (based on reports in Times Of India). Out of these 88 unicorns, 44 were added in 2021, and 7 of them hatched in 2022. Their total valuation stands at around 100 billion dollars or maybe even more.
The year 2020-21 saw a rush in the emergence of unicorns. Well, various factors triggered the hatching of more and more unicorns. Mentioned below are some of the factors listed for the same:
- Work from home during the pandemic fuelled the growth of digital platforms in India, which resulted in a long list of ventures declaring themselves as unicorns. The major three factors which attracted the investors are:
- A thriving digital payment ecosystem
- The large smartphone user base
- Digital-first business models
2. Tech companies like Meesho, Mamaearth, Cred, ShareChat, Upgrade are a few that have become household brands these days and have contributed mainly to India’s unicorn boom.
3. The pandemic has demanded the digitalisation of commerce in every aspect of one’s life, which has created a significant supply chain of sustainable and affordable smartphones.
4. Besides fintech, e-commerce, grocery delivery apps, food delivery partners, ride providers, etc., have hugely contributed to the unfolding ventures as unicorns.
Indian Startups that Hatched as Unicorns in 2021
As of February 9th, 2022, India is home to 88 unicorns whose value, when summed up, comes to 295-300 billion dollars. The years 2019, 2020, and 2021 saw the birth of unicorn’s maximum unicorn number of unicorns with 9, 10, and 44, respectively. Covid-19 caused a significant number of socio-economic sufferings globally. Despite this, Indian entrepreneurs have worked effortlessly and diligently during these challenging times to boost the economy and contribute to covid-19 relief efforts.
The motto of 2021 was to rain unicorns in India, which was achieved because 44 Indian ventures were awarded the horn, which is a dream of every startup. These 44 ventures helped boost the economy and pumped up the business ecosystem, which helped many ventures get to the stage of soon-to-be unicorns.
Geographically, India’s high-tech centre is in Bangalore; also India’s unicorn capital with the largest number of unicorn headquarters housed, followed by the national capital, Delhi, and Mumbai. While we see a rise in the number of unicorns in tier 1 cities, there is a misconception that this ecosystem is restricted. However, it’s increasing until the last district of the country. Traditional sectors such as fintech, e-commerce supply chain and logistics, internet software, and services dominate the arena, but a strong wave of unconditional sectors such as content, gaming, hospitality, data management, analytics, etc., are also making their place on the list.
Social Security from the Unicorns that are Indigenous to People
Startups are a driving force that has a major hand in helping the country’s economy take off to new heights. The main reason behind this is the amount of employment a startup with great revenue can generate. As Indians celebrate the occasion of emerging as the third-largest ecosystem for startups across the globe, it has created a significant impact in terms of job growth, capital markets, and society as a whole.
The Year of Titans!
According to reports of many tech startups, the year 2021 was the year of titans. This year, the Indian startups concocted around 6.6 lakh jobs directly and around 34 lakh indirectly. 70% of these jobs were enabled by e-commerce, mobility, and food delivery platforms. Startups are developing innovative solutions and are creating large-scale employment (as per reports of the national investment promotions and facilitation agency). They have also claimed that the startups would create around 15 lakh more jobs by 2025 and make India a digital colony.
Indian unicorns are also exploring the public listing avenues as a next step to realise their growth potential. Some of the big unicorns which offered an initial public offering (IPO) included Zomato, Nykaa, Paytm, etc., when many were already in line, like; Mobikiwik and CarDekho.
Today one out of every ten unicorns globally are from India. This is a testament to the vibrant startup ecosystem present in India.
Also, the global startup ecosystem is witnessing a shift as the world increasingly realises the potential of new ventures. As a result, there is a gradual transition from the age of unicorns to decacorns, which are startup companies that exceed a valuation of more than ten billion dollars.
As of January 2022, there are 46 companies worldwide that have achieved the status of being called the decacorns. Flipkart, Swiggy, Byju’s and Paytm are among the top Indian ventures that gained the decacorn title!