Feb 18, 2022
Unicorns in Making: Would 2023 be also a blockbuster year for India?
With the expansion of the startup scenario, aspiring business owners are becoming more aware of terms like acquisition, bootstrapped startups, pitch, burn rate, business valuation, run rate, financial modeling, etc. The importance of angel investors and venture capitalists has been quickly increasing for nurturing companies in the journey to become a unicorn. A startup funded by investment firms in India or outside, with a valuation of more than $1 billion, is referred to as a unicorn. A recent analysis by the Hurun Research Institute predicts that India will be home to 122 new unicorns in the next two to four years, even though the Indian startup ecosystem is now experiencing a fundraising winter. India currently has 82 unicorns. 103 unicorns have been added to the list by India so far, although some of them have also left the list as valuations have fallen. Among the startups that have lost their unicorn status are Blinkit (formerly Grofers), Paytm Mall, Shopclues, and Snapdeal. The rapid commerce startups Zepto and Dunzo, Turtlemint, Ather Energy, Vivriti Capital, and the fintech company Vivriti Capital are the next unicorns in the making. They are anticipated to join the unicorn club within the following two years.
Investments in Indian startups: Becoming a Global Hub
The rapid changes in Indian consumer behavior, the development of the digital economy, and the desire to participate in the new shared economy model have made India the global epicenter of opportunity. They will undoubtedly make it a unicorn hub by 2023.
A recent estimate from investment fund Iron Pillar predicts that by 2025, India could produce more than 250 unicorns or privately held startups valued at $1 billion or more. The combined worth of India's unicorn companies is expected to reach $535 billion in 2022, according to an analysis by Iron Pillar titled "India Tech Trends." According to the fund, the number of unicorns in the nation has more than doubled to 130 during the past 15 months, including those with Indian domiciles.
The startup ecosystem is also being boosted by a number of government incentives provided through the Startup for India initiative, such as self-compliance with environmental and labor laws, up to 80% rebates on patent filing costs, income tax exemption, easier public procurement standards, and simple company winding up procedures.
Unicorns in Making
The listing of would-be unicorns and gazelles by the ASK Private Wealth Hurun India Future Unicorn Index 2022 looks very promising for the next year. A gazelle is defined as a startup that was created after 2000 and had the potential to become a unicorn. Usually, their worth is projected to be between USD 500 million to USD 1 billion. India is expected to show promising results in terms of making new unicorns in 2023. According to the Unicorn Index, Bengaluru would continue to lead with 46 unicorns, followed by Delhi and Mumbai.
Startups such as Shiprocket ( Logistics), Zepto (Foodtech), ClearTax ( FinTech), Rapido (Mobility), Dunzo (logistics), Ninjacart(Agritech), Vivriti Capital ( Financial Services), Ather Energy ( Mobility-EVs), Turtlemint (Fintech), and Shiprocket ( Logistic) have shown promising results and are expected to become unicorns in 2023.
Saahil Goel and Gautam Kapoor founded the logistics business Shiprocket, which offers MSMEs tech-enabled logistical solutions. The firm, founded in 2017, has more than 1,50,000 satisfied customers and has a more than tenfold increase in the total number of monthly shipments. $355 million total has been invested in it. Aadit Palicha and Kaivalya Vohra launched the Mumbai-based firm Zepto, which provides a 10-minute grocery delivery service. The firm, which was founded in 2021, is already distributing 3,500 products across 11 locations, with ambitions to expand its operations soon. $360 million total has been invested in it.
Online insurance marketplace Turtlemint, a startup in the insurtech industry, assists customers in choosing and purchasing the best insurance plans. The business, which was established in 2015 by Dhirendra Mahyavanshi and Anand Prabhudesai, has a network of more than 100,000 insurance consultants who serve more than 1.5 million clients across more than 5,000 major cities and towns. It is funded to the tune of $200 million. An electric mobility firm, Ather Energy, which was established in 2013 by Tarun Mehta and Swapnil Jain, has produced the Ather 450X and Ather 450 Plus electric scooters. The business has received $290 million in total funding.
According to a Media Report (YourStory), in H1 2022, 891 investment deals were reported, which is 82.8% more than in H1 2021. The deals surely demonstrate the strength of the Indian startup ecosystem. In 2022, till September, there were 541 deals.
Startups raised over $ 17 billion, which is 1.8 times the amount they raised in the first half of 2021 ($9.4 billion). Sequoia Capital India has been the most active startup investor. Other active investors include JC Team Capital, Tiger Global Management, CRED Founder Kunal Shah (creator of CRED), Better Capital, Inflection Point Ventures, LetsVenture, Accel, Blume Ventures, 9Unicorns, and Alpha Wave Global.
The Shining Sectors
FinTech, EdTech, E-commerce, Social Networks, FoodTech, Biotech, Logistics and Supply Chain, Media and Entertainment, D2C Brands, SaaS, Cybersecurity, and HealthTech are some of the top industries seeking investment. With the second-largest consumer internet market and a growing domestic market, India has been successful in creating an environment conducive to starting a new business. Without a doubt, technology has been the main driver of the startup environment. In addition to dominating the Indian startup ecosystem, the financial, consumer, technology, and services sectors will receive 75% of all venture capital funding in 2020. Online fantasy sports are also growing in popularity, and according to NITI Aayog research, India will soon become the center of these games. According to the report, the industry may potentially produce 1.5 billion online transactions by 2023 and attract FDI worth more than INR 10,000 crore over the next years.
The year 2023 is expected to see much in VC funding. Global Venture Capital firms are showing the ways how to invest in startups in India. Startup investment and angel funding activities. Startups are all set to leverage their innovations and expertise to attain a higher stage of advancement in valuations and funding.