We at Jobaaj have reported about the emergence of several unicorns, including LeadSquared, the newest addition to India's Unicorn Club. This addition brought up the Unicorn total to 103 in India.
But, what is a unicorn?
A Unicorn refers to a privately held company or a startup which has a valuation of $1 billion or more. This term was coined by Aileen Lee, a seed investor, and venture capitalist, in 2013. Today, Bytedance, Stripe, and SpaceX are the highest valued Unicorns in the world, with Bytedance's valuation surpassing $100 billion.
These companies are privately held and out of the reach of retail investors. These companies' main source of funding are seed, angel investors, or venture capital in the early stages and PE funds at a later stage.
Carnival Cinemas raise Rs 400 crores from Yes Bank, read more.
Building a unicorn is hard work. It takes tremendous effort, dedication, a valid idea, and proper execution to build a business that can invite funding from investors who are willing to value the company at $1 billion or above. Alphabet and Meta, formerly Facebook, are heralded as some of the earliest Unicorns in the world.
Where is India in the ranks?
India's first unicorn was InMobi which turned unicorn in 2011, two years before the idea of a Unicorn was established. 11 years later, we have hit the 100 Unicorn mark and gone beyond it. India ranks third on the list of countries with the most Unicorns as it dethroned the UK in 2021.
Ecommerce startups have taken the lead in India as 23 out of 103 startups belong to the e-commerce sector with Fintechs coming in second at 21. A noteworthy fact is that the fintech sector took the top spot globally.
India witnessed 44 companies turning unicorns in 2021 as Indian startups raised over $42 billion in 1,500+ deals in the year. The combined valuation of the Indian Unicorns has surpassed $300 billion as of May 2022.
Where are we heading?
The US has over 800 Unicorns, 6 times more than that of China and 8 times more than that of India. As of March 2022, it is reported that over 1,900 unicorns exist worldwide.
Indian startups have their work cut out for them. Reaching the US's level will be a challenge as the US is the only country whose Unicorns have a combined value surpassing $1 trillion.
India is facing steep competition from countries like Brazil, China, and Israel. The time taken for Indian startups to turn into unicorns is one of the highest in the world with an average of 8 years, with Brazil being the leader at 2.9 years. China is second on the list for the number of unicorns minted and Israel minted a total of 42 startups in 2021 with 92 in total.
Recently, at the mega semiconductor conference, Minister of State for Electronics, IT, and Entrepreneurship head Rajeev Chandrasekhar made a projection: India will see 1,000 unicorns in the next two to three years.
While speaking in Munich, Germany, PM Narendra Modi spoke about the Unicorns of India, stating that India was leading the "way of innovation". He also said that on average, India had a unicorn every 10 days while noting the high spirit of innovation.
Today, India has placed itself in the Top 3 countries with the most unicorns but it is not alone. Israel is catching up to it fast and it is a rival to be taken seriously. Moreover, funding is slowing down considerably on a global scale as poor macroeconomic conditions are forcing investors to exercise caution.
Moreover, the Indian startup ecosystem is also facing several issues. Founder frauds such as Zilingo and BharatPe, heavy losses, cutbacks, and layoffs as cost-saving measures, etc. are some of the most notable issues faced by these startups as they are turning thrifty to save scarce capital.
We in India need a favorable ecosystem, lenient policies, and greater EoDB (Ease of Doing Business) to help our startups perform well globally. We as Indians have the attention of the world. Recently, we at Jobaaj reported about Sequoia Capital's fundraising of $2 billion to invest in Indian ventures and growth funds, bringing the group's total to $8 billion in the last 15 years.
Only time will tell how India's Unicorn landscape will shape in the future.
Report by Jobaaj.
This news piece is brought to you in association with jobaaj.com
