Increased focus on digitisation because of the contactless requirement of the Covid-19 pandemic has seen investments in Indian startups soar to a two year high. In just 4 months of this year, 11 Indian startups have joined the coveted US$ 1 billion Unicorn club. Fintech, health-tech, edtech, agritech and enterprise tech segments are witnessing rapid digital adoption and the Unicorns are mostly related to these businesses.
In the venture capital industry, the term Unicorn refers to any startup that reaches the valuation of US$ 1 billion. Unicorns like Uber, Airbnb, Snapchat & Pinterest have created history. It was to lay emphasis on the rarity of such startups, that the term was first coined by Aileen Lee, a US-based seed investor and founder of Cowboy Ventures when she referred to the startups that had a valuation of over US$ 1 billion. The startups that exceed the valuation of US$ 10 billion are grouped under the term called decacorn (a super unicorn). Dropbox, SpaceX and WeWork are some of the examples of decacorns.
Groww is the latest addition to India’s Unicorn list this year. The Bengaluru-based investment tech platform founded by ex-Flipkart employees, has raised US$ 83 Mn in its Series D funding led by Tiger Global. Groww offers direct plans for mutual funds and investing via mobile application and web platform. It also allows users to invest in stocks, mutual funds, ETFs, IPOs, and Gold.
The others who joined this league in 2021 so far are:
Gupshup (Conversational messaging) valued at US$ 1.4 billion
Sharechat (Social Media) valued at US$ 2.1 billion
PharmEasy (Epharmacy) US$ 1.5 billion
Cred (Credit card payment Rewards) US$ 2.2 billion
Meesho (Social Commerce) US$ 2.1 billion
FirstCry (Ecommerce) US$ 2.1 billion
Five Star Business Finance (NBFC) US$ 1.4 billion
Infra.Market (Construction material marketplace) US$ 1 billion
Innovaccer (Healthtech) US$ 1.3 billion
Digit (General Insurance) US$ 1.9 billion
Growth-stage and late-stage funding remained strong in the first quarter (Q1) of 2021 in India, even as overall investment witnessed a decline compared to the first three months of 2020. According to an Inc42 Plus analysis, about US$ 2.73 billion was invested in Indian startups between January 2021 and March 2021. This represented a 33% decline from US$ 4.1 Bn reported in the same quarter last year.
With 39 unicorns, India ranks 3rd in the total number of unicorns globally. India added the second highest number of unicorns (12) in 2020 after the USA.
A Nasscom-Zinnov report predicts that India is on track to have a 50-plus strong 'Unicorn club' in 2021. The report titled 'Indian Tech Start-up Ecosystem On the March to Trillion Dollar Digital Economy' said the Indian tech start-up base is witnessing a steady growth of 8-10 per cent year-on-year, and over 1,600 tech start-ups were added in 2020.
Although cautiously optimistic, the report said 2021 promises a return to normalcy for the Indian tech start-up ecosystem and deep-tech and new start-up hubs will continue to grow at 40-45 per cent CAGR, it said.
The report said over 2,100 start-ups are leveraging deep-tech, up from over 1,600 in 2019.