With the country getting its 100th unicorn last week, Open, after it raised USD 50 million at a valuation of USD 1 billion, start-ups have so far raised over USD 80 billion from investors to date, creating a total market value of more than USD 300 billion. ‘Unicorn’ refers to the start-ups that are valued more than USD 1 billion.
The year 2021 experienced a huge surge in the number of unicorns, registering a total of 44 startups entering the Unicorn club throughout the year with a total valuation of USD 93 billion. In the first four months of 2022, India has given birth to 14 unicorns with a total valuation of USD 18.9 billion.
However, According to data shared by data analytics firm Tracxn Technologies with Moneycontrol, only 23 of the 100 unicorns, or start-ups valued at USD 1 billion or more, have managed to achieve profitability for a financial year.
“The entrepreneurial spirit exists throughout the length and breadth of the country and is evident by the spread of the Department for Promotion of Industry and Internal Trade (DPIIT) recognised start-ups across 647 Indian districts encompassing all 36 states and Union territories,” the commerce and industry said in a statement last week.
Since the launch of the Startup India initiative on in January 2016, over 69,000 start-ups have been recognised in the country till May 2.
“Innovation in India is not just limited to certain sectors; we have recognised start-ups solving problems in 56 diverse sectors with 13 per cent from IT services, 9 per cent healthcare and life sciences, 7 per cent education, 5 per cent professional and commercial services, 5 per cent agriculture, and 5 per cent food & beverages,” according to the statement.
3one4 Capital founding Partner Siddarth Pai told Moneycontrol that investors and entrepreneurs should focus on companies’ paths to profitability rather than on absolute profitability. “If the company stops growing and it doesn’t converge on a path to profitability, it becomes exceptionally hard for anyone to actually make an investment case. But if you have a company that’s turning profitable and growing very, very fast, it becomes a very interesting investment prospect,” Pai added.
3one4 has backed unicorns like Darwinbox and neobanking platform for small and medium enterprises Open.
The ministry has said that while every start-up has its unique journey to becoming a unicorn, the minimum and maximum time taken by a start-up to become a unicorn in India are 6 months and 26 years, respectively.
“Till FY 2016-17, approximately, one unicorn was being added every year. Over the past four years (since FY 2017-18), this number has been increasing exponentially, with a whopping 66 per cent year-on-year growth in the number of additional unicorns being added every year,” it added.
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