In today’s world, unicorns are not just mystical creatures with single spiraling horn that sparkles but are companies that have reached a valuation of $1 billion or more. The meaning of unicorn startups is interesting, as the word “unicorn” is used as a metaphor for something that’s extremely rare. Likewise, becoming a business unicorn or a billion-dollar company is something that few businesses can attain. Many simply die out, while others plod along.
Globally, startups that set the new standards for innovation and growth as unicorns offer unique solutions and new business models in their respective industries.
Business unicorns attract venture capital money and angel investors in the process.
In India too, the startup scene is surging at an unprecedented rate in the last decade and some have reached valuations in the billions as well.
Mobile advertising platform InMobi was India’s first business unicorn announced in 2011. As of July 2022, India is home to 105 unicorns with a total valuation of nearly $340 billion.
In 2021 itself, India witnessed the rise of 44 unicorns with a total valuation of $93 billion. Bengaluru, Delhi NCR, and Mumbai are said to be the top cities of unicorn headquarters.
Collectively, these firms are pushing India into becoming the third largest unicorn market, after China and Hong Kong.
Let’s learn about some of the business unicorns that dominate the Indian scene and are role models for aspiring businesses.
The early unicorns – setting the pace
India’s 105 unicorns fall into two categories: early unicorns and more recent successes.
In the year 2011, InMobi became the first Indian unicorn startup company. The Bengaluru-based advertising and marketing platform was founded by Abhay Singhal, Amit Gupta, Piyush Shah, Naveen Tewari and Mohit Saxena.
Today, InMobi has a valuation of $12 to $15 billion, and competes with global giants such as Google, Adobe, Adform and Amazon, among others. The company is backed by SoftBank, Kleiner Perkins Caufield Byers and Ram Shriram’s Sherpalo Ventures.
This Indian e-commerce company is headquartered in Bangalore and incorporated in Singapore as a private limited company.
The company initially focused on online book sales before expanding into other product categories such as consumer electronics, fashion, home essentials, groceries, and lifestyle products.
Flipkart competes primarily with Amazon’s Indian subsidiary and domestic rival Snapdeal. The business unicorn also owns PhonePe, a mobile payments service based on the Unified Payments Interface (UPI).
In August 2018, U.S.-based retail chain Walmart acquired a 77% controlling stake in Flipkart for $16 billion, valuing Flipkart at around $20 billion.
Founded by Sameer Nigam, Rahul Chari and Burzin Engineer, PhonePe is a digital payments and financial technology company. As mentioned, it is owned by Flipkart, a subsidiary of Walmart.
Using the PhonePe app, which is available in 11 Indian languages, people can:
- Send and receive money
- Recharge mobile/data cards
- Make utility payments
- Pay at shops
- Invest in tax saving funds
- Buy insurance, mutual funds, gold, and silver
- Booking buses, flights, and hotels through this app
In March 2022, the business unicorn claimed to become the first digital payments platform to cross 100 million transactions per day.
One of India’s best learning apps, BYJU’s offers a personalized learning experience via blended videos, interactive classes, and teachers who make every concept easier to learn.
The Bengaluru-headquartered app maker, founded by Byju Raveendran and Divya Gokulnath, has a valuation of $23 billion as of March 2022. This makes it a decacorn, or a startup that is worth at least $10 billion, and has over 115 million registered students.
This Indian business decacorn has offices in 21 countries and is known for its acquisition spree with Great Learning, Epic, Aakash Educational Services, TutorVista and Edurite from Pearson, WhiteHat Jr and more buyouts to grow.
Founded in 2010 by Bhavish Aggarwal and Ankit Bhati, this app provides on-demand taxi services, car rental services, and auto services that can be booked from anywhere to reach anywhere.
Ola Cabs allows people to book rides with a simple click on the mobile app.
The business unicorn has also introduced Ola Play, a connected in-cab entertainment platform, bringing to passengers the content of their choice. The Bengaluru-based ride-hailing app is valued at $6.5 billion.
OYO was the big disruptor in India’s hotel industry, since its entry in 2013.
The Gurgaon-based company provides rooms, staff, food, and standardized services on a moderate budget that can be booked through the app.
Founded by Ritesh Agarwal, it is one of the well-designed apps that take full responsibility for the services of the hotels that are listed on its platform. OYO has a valuation of over $9 billion.
An online food ordering and delivery platform, founded in July 2014, Swiggy operates in 500 Indian cities as of September 2021.
Founded by Nandan Reddy, Sriharsha Majety and Rahul Jaimini, it has a valuation of $5.5 billion.
This business unicorn follows excellent logistics operations with best-in-class experience for the customers. It is exponentially growing every month as it invests in bringing up the logistics network technology.
The Indian multinational restaurant aggregator and food delivery company founded by Deepinder Goyal and Pankaj Chaddah in 2008 provides:
- Information, menus and user-reviews of restaurants
- Food delivery options from partner restaurants
In mid-2021, Zomato listed its shares in Indian stock markets. Its initial public offering (IPO) was oversubscribed 35 times, giving it a valuation of $12 billion.
Recent business unicorns to learn from
The global pandemic, along with the ensuing lockdown and social distancing, has in many ways accelerated the growth of digital startups. Home-bound customers frantically sought out faster speed of service delivery and heightened experience.
Here are some startup businesses that entered the unicorn club in the last two years.
Founded in 2015 by Chaitanya Peddi, Jayant Paleti and Rohit Chennamaneni, Darwinbox is a cloud based HRtech startup that caters to companies’ HR needs across recruitment, onboarding, payroll, travel and people analytics among others.
The Hyderabad-headquartered company claims to have around 500 enterprises and large tech companies as clients in India and Southeast Asia. This includes the likes of Tokopedia, Indorama, Zilingo, Fave, Adani Group, Mahindra Group, Kotak, TVS Motor Company, National Stock Exchange, Ujjivan Small Finance Bank, Swiggy, BigBasket and others.
With funding led by Salesforce Ventures, Technology Crossover Ventures (TCV), Sequoia India, Lightspeed India, the business unicorn has raised a total of $107 million in funding over seven rounds.
Founded in September 2018 by Vineet Rao, Sourjyendu Medda, Sankar Bora and Rajat Shikhar, DealShare is a social e-commerce marketplace. The Bengaluru-based startup enables first-time internet users to shop online, targeting middle-class consumers.
DealShare sells grocery and household essential products through social media and messenger platforms like WhatsApp. The business unicorn directly sources household items of lesser-known brands and sells products via community sales.
Backed by investors such as Tiger Global Management, Alpha Wave Incubation, Kora, DF International Partners and Twenty Nine Capital Partners, DealShare has raised around $330 million funding until now.
Started by Falguni Nayar in 2012, Nykaa is one of the prominent online marketplaces for beauty and personal care products.
In 2020, Nykaa became the first Indian unicorn startup headed by a woman.
Nayar quit her investment banking career to start the beauty focused brand. Over the years, the business unicorn got investors including private-equity firm TPG, Fidelity and Indian celebrities Alia Bhatt and Katrina Kaif.
Nykaa runs its online operations through mobile applications and websites, along with 80 brick-and-mortar stores across the country. The Mumbai-based beauty retailer is valued at an estimated $1.2 billion.
The ‘Kirana’ commerce startup was founded in 2016 by Sandeep Deshmukh, Saurabh Nigam and Shitiz Bansal.
The Pune-based unicorn acts as a distribution arm of fast-moving consumer goods (FMCG) companies, using crowdsourced logistics networks to reach a wide network of customers.
The company is valued at $1.5 billion and backed by Masayoshi Son’s SoftBank, New York-based Goldman Sachs, Prosus Ventures, InnoVen Capital, and Abu Dhabi’s Chimera Investment, a subsidiary of Abu Dhabi’s Royal Group.
LEAD (formerly Lead School)
LEAD is the first edtech startup to enter the Indian unicorn club in 2022. The Mumbai-based edtech startup was founded in 2012 by Sumeet Mehta and Smita Deorah.
This 2022 business unicorn offers integrated curriculum and technology solutions to private schools. LEAD claims to have tied up with over 3,000 schools catering to more than 12 lakh students in 400 cities and 20 States.
Backed by WestBridge Capital with participation from GSV Ventures, the company has a valuation of $1.1 billion in 2022.
Xpressbees was founded in 2015 after being spun off from e-commerce major, FirstCry. It is an e-commerce logistics company that offers express delivery services across 3,000 cities and delivers over 1.5 million packages per day.
Based in Pune, the startup is backed by private equity funds Blackstone Growth, TPG Growth, ChrysCapital and Norwest Venture Partners, putting the company at a valuation close to $1.2 billion.
YUBI (formerly CredAvenue)
Founded by Gaurav Kumar in 2017, Yubi, which was formerly called CredAvenue, is a debt platform that connects enterprises with lenders and investors.
The Chennai-based business reached $1.3 billion valuation in March 2022, becoming India’s fastest fintech unicorn. The business claims that it has over 2,300 corporates and over 750 lenders in its portfolio.
As of today, YUBI is backed by Sequoia Capital, Insight Partners, B Capital, Lightspeed Venture Partners, TVS Capital Funds Dragoneer Investment Group, Vivriti Capital and Indian fintech CRED. In all, YUBI has raised over $227 million in funding.
The list is longer, with companies such as Digit Insurance, Fractal, Livspace, Uniphore, Hasura, Amagi Media Labs, Oxyzo Financial Services, Games24x7, Open Financial Technologies, and many more entering the fray to establish themselves as successful unicorns.
The road ahead
These are only a few examples of startups that have become business unicorns in India. The country, as we see, has witnessed a boom in startup companies and a unicorn revolution in recent years.
Experts believe this is just the beginning of a gold rush in India.
However, high attrition, maintaining the capital flow, talent shortage and limited IPOs are creating hurdles for new entrants. Global macroeconomic conditions triggered by all-time high inflation and fears of recession may also have a negative impact on the country’s potential unicorns for the next couple of quarters.
More consumer-centric models need to be created to tap a larger population base. The target shouldn’t be limited to urban areas but to reach rural India too, to address the digital divide.
Proper branding, strategy, use of deep technology such as artificial intelligence (AI) and data analytics, consumer acquisition and proper execution will attract venture capitalists and more investments.
On the brighter side, the Indian government’s policies like Make in India, Digital India, Atmanirbhar Bharat, etc. have attracted talents that early-stage startups should use.
Business unicorns are not easy to create, and require ample hard work, planning and perseverance. But if you have ambitions to build a billion-dollar company someday, it’s worth learning about those who have achieved the feat and work towards your goal.