Nearly 15-20 Unicorns Likely To Go Public In Next Two Years: Kotak’s Jayasankar

V Jayasankar, managing director at Kotak Investment Banking (KIB), is optimistic that the funding winter will end this year and expects that around 15-20 unicorns are likely to go public in the next 1-2 years.

He also believes that India will have more than 10 internet decacorns by the end of next year.

“Equity worth $10 Bn is expected to be raised from the IPO market in the next 12-24 months. Over 10 internet decacorns will emerge by 2025-end and at least two to three large conglomerates will be established,” Jayasankar said in KIB’s annual media round up.

The managing director at KIB expects that the internet segment will see nearly 20 to 30 mid-to-large size mergers and acquisitions in the next 12-24 months. 

This comes after increasing interest rates and the Israel-Hamas and Russia-Ukraine wars impacted the overall merger and acquisition activity.

According to Inc42’s “Indian Tech Startup Funding Report 2023”, the total startup funding stood more than $10 Bn in 2023, representing a 60% drop from 2022 and a sharp 76% fall from the peak in 2021. Notably, this is a seven-year decline in funding for the Indian startup ecosystem.

Mirroring the funding trends, investor participation in 2023 also saw a decline from the previous year. Over 1,500 startup investors were involved this year, a 37% decrease from the more than 2,400 recorded in 2022.

“Funding winter will end by 2024 with the return of public market dynamism. Large internet IPOs will catalyse across-the-board deal-making,” Jayasankar said.

As of March 2023, India had five decacorns – BYJU’s, Swiggy, Flipkart, PhonePe and Nykaa. BYJU’S, an edtech platform founded by Byju Raveendran, has been struggling to raise capital, make payrolls and pay off its billion-dollar-plus debt. Recently, US-based asset manager BlackRock has once again slashed its valuation of edtech major BYJU’S, this time around 95% from $22 Bn to $1 Bn.

New-age internet companies like Ola Electric, FirstCry, Awfis and MobiKwik have filed draft papers with the stock market regulator and are expected to debut on the exchanges in 2024.

India is home to 112 unicorns with a total valuation of more than $347 Bn. Of them, 45 startups became unicorns in 2021 and 22 with a in 2022. Last year, only Zepto and Incred became unicorns.

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