The startup culture in India gave birth to the new Entrepreneurial ecosystem of the country. For more than a decade, there have been continuous innovations and diversification in the startup’s mores. Subsidiaries of some of the established startups like Ola Electric, PhonePe, One97 ( Paytm Mall), and other startups like Oyo Rooms, Byju’s, Bigbasket, Nykaa, Dream11 have already started leaving their marks of success in the startup ecosystem existing in the country. The transfiguration and retrofit of the Indian startups thus gave birth to Unicorns.
Unicorns have already started to imprint a new history in the Startup and Entrepreneurial culture prevailing in India as well as the rest of the world. The growth rate of Unicorns from the year 2017 has grown tremendously leading all the traditional startups to go technologically woke. The growth trajectory of 18% in the Unicorns incepted from the year 2018 to 2019 shows how the tech startups are being matured. As of 2020 on a global scale, India is ranked at 3rd position in the number of Unicorns and there are around 9000 startup and 28 unicorns in the country currently. According to the National Association of Software and Service Companies (NASSCOM), there are over 50 potential unicorns in the country at present that have received cumulative funding of more than $50 million.
India’s only ed-tech Unicorn “BYJU’s” is a laudable example of any notable structure of the startup. BYJU’s was found in 2011 by Byju Raveendran to offer a learning program on digital platforms. The elevation of the company began in 2013 when it received its first seed funding from Aarin Capital. In July 2017, it acquired TutorVista (including Edurite) from Pearson. In March 2018, BYJU’S became a unicorn and is valued at US$1 billion (INR 6,505 Crore), and in January 2019, BYJU’S also acquired a US-based Osmo for $120 million which is a maker of educational games.
Today, BYJU’S is a company with an approximate valuation of $5.7 billion with over 47 million students and 3.5 million annual paid subscriptions. Esteemed Investors like Tencent, Chan Zuckerberg Initiative, Sequoia Capital India, IFC, CPPIB and many more business giants are investing in BYJU’s. Since the beginning of 2020 as the Covid-19 pandemic has hit globally, the growth rate and website traffic of BYJU’s has spurred remarkably high. In March 2020, the company announced free access and since then the number of students learning on its app has increased by 150% that is 7.5 million new users. In such a chasmic recession period all over the globe, BYJU’s has managed to earn gross revenue of 350 crores in the month of April. As per a report by BARC India and Nielsen says that there has been a 30% increase in the time spent on education apps on smartphones since the lockdown. Ed-tech Unicorn played trump card in this situation and changed the Indian startup ecosystem by helping 250 million school-going students in India by helping them to cope up with their studies and to keep themselves protected from the deadly COVID-19. BYJU’s is definitely the one who is going to get the most advantage from the current milieu which insists teachers, students, parents, and other stakeholders who are related to the education sector in any aspect to take the online route to keep the process of learning ongoing without any hindrance.
Another Unicorn called “Zomato” is a food tech which is doing exceedingly well in the startup generation. It was found by Deepinder Goyal and Pankaj Chaddah in 2008 to provide food delivery options from partner restaurants in various cities, menus, information, and user reviews of restaurants. Between 2010 to 2013, Zomato upheaved around US$16.7 million from Info Edge India. In 2012, the company expanded its operations globally in several countries like the USA, UAE, UK, South Africa, New Zealand, Canada, Australia, etc. Around September 2017, Zomato claimed themselves “turned profitable” in all 24 countries where the company was operating its business and also introduced a “zero-commission model” for partner restaurants. In September 2019, Zomato started laying off its employees and it fired almost 10% of its workforce, which is around 540 people because of the failure of some back-end activities like customer service, merchant, and delivery partner support functions. Today giants like Alibaba, Sequoia Capital, and Info Edge India have their stakes in Zomato. And the food tech Unicorn- Zomato has acquired more than 12 companies including Uber Eats which one of the rival companies.
In April 2020, amid the COVID-19 pandemic when many restaurants and delivery partners were suffering, Zomato launched its grocery delivery services named “Zomato Market” in 80+ cities across India and also introduced Contactless Dining to get ready for a post-lockdown world which aims to minimize or to eliminate the use of high-touch elements such as the menu, ordering, and bill payments through bar codes or the app while the staff will wear masks. In May 2020, Zomato again laid off 520 employees due to the COVID-19 pandemic, and when news flashed that a corona positive delivery person of Zomato infected more than 70 families. The question now arises is that is it possible to have a complete contactless delivery or dining experience at all?
Studies show that after the outburst of Covid-19, most of the startups existing in the country will buzz to shift their businesses online which will lead to an increased number of tech startups and more initiation of Unicorns. A report of NASSCOM says that India will create more than 100 Unicorn-Private Companies with a valuation of $1 billion in the next five years. The entrepreneurial ecosystem will surely flourish by 2025 as the parent unicorns will breed and give birth to more successful startups.
The startup investors have already started to increase the velocity of investment from the year 2020 since the number of unicorns produced in the county are rapidly burgeoning. By the year 2023, some of the established Indian unicorns are expected to go global and leave their brand appeal on the rest of the world. Sudhir Sethi, founder and Chairman of Chiratae Venture India Advisor states that “In the short to medium term, a period of three years or so, we expect a lot more secondary exits. If we take a three to six or seven-year period, I truly believe that India will see a number of Unicorns and this is anywhere between 10-20 IPO in the Indian stock markets.”
As Mohandas Pai, the chairman of SEBI said, India’s stock market is set for a wave of Unicorn listings and more than 20 tech startups which are likely to be valued at $300 million to $10 billion are ready to be listed in the next 3 years. The Unicorns established or the potential Unicorns are already setting benchmarks for some newbie companies and they are robustly indicating towards the strengthened and matured Entrepreneurial ecosystem. The unicorns will face some issues because of the pandemic but they will eventually bounce back because of the huge investments going into them.