India’s 100 Unicorn Startups – Today Marks A New Milestone For India’s Startup Economy

After a whopping 44 unicorns in 2021, the milestone of a 100 unicorns was just a touching distance away for the Indian startup ecosystem. By the end of 2021, India had doubled its unicorn count to 84, and two publicly-listed companies — MapmyIndia and EaseMyTrip — also joined the unicorn club. And in the first quarter of 2022, this number grew by 13 more to 99 startups with a valuation of over $1 Bn.

Now, with the entry of neobanking startup Open, which raised a Series D funding round from IIFL with participation from Temasek, Tiger Global and 3one4 Capital. With its $50 Mn fundraise, the startup claims to have become the 100th unicorn in India.

The announcement of the 100th unicorn in India saw a range of reactions from the ecosystem, with many pointing out the glorious run for startups in the past decade.

“What an incredible milestone! 1st Indian unicorn was in 2011. Here we are – 11 years later welcoming the 100th Indian unicorn,” tweeted Rajan Anandan, managing director of Sequoia Capital India.

Piyush Goyal, the union minister for industry and commerce, also chimed in to celebrate this major milestone.

“India = Ideas + Innovation + Investments,” Goyal said, adding that India has hit a century in style.

Open’s entry into the unicorn club comes after a month where large funding rounds were by and large missing from the ecosystem, and there was a feeling that the milestone of the 100th unicorn would take a long time, due to the plateauing of the funding boom.

100 Unicorns: Decoding India’s Unicorn Rush

The acceleration in funding and capital being raised at high valuations in the past couple of years has totally transformed the startup landscape. In a record-breaking calendar year for Indian tech, startups raised about $42 Bn across 1,579 deals in 2021, leading to a unicorn spree.

With 44 unicorns last year, all previous long-term predictions about the number of unicorns were out of the window. And a new benchmark was set as far as startup projections and expectations.

For instance, as per an Inc42 report at the end of 2019, we predicted that India would have 100 unicorns by 2025. The expected trajectory was totally changed by the mass adoption for digital products and services by consumers and businesses in the wake of the pandemic and over the past two years. But accounting for the growth in 2021, we had revised this to 100 startups before the end of 2022. And with 100 unicorns coming even before half the year is over, we now believe that by 2025, India will have 250 unicorns.

Since 2020, Indian startups have grown and scaled rapidly, and with this growth, came the flood of capital from foreign investors, while even the domestic investor pool expanded. Now the sights are set on the next major milestones.

Already, the government is proclaiming a target of 1,000 unicorns within the next two-three years, and predicts that a vast number of the new unicorn startups will come from India’s hinterlands. Whether this will actually pan out remains to be seen as several critical sectors seek more clarity in policy.

However, the fact that the past two years has accelerated the pace of unicorn creation is plain to see. Here are some interesting insights from India’s 100-strong unicorn club.

Unicorns In India: Total Valuation Of Over $333 Bn

India’s 100 unicorns have a cumulative valuation of $333 Bn, with Flipkart and BYJU’S being the two highest valued privately-held startups with a valuation of $37.6 Bn and $21 Bn respectively.

Among publicly-listed companies with a market cap of over $1 Bn, Nykaa currently leads the charts with a valuation of over $10.6 Bn as of last Friday.

Ecommerce Leads; Fintech Second

Not only did Open become the 100th unicorn in India, it is also the 20th unicorn from the fintech sector. Besides this, Open is also the third neobanking startup to enter the club after Zeta and Razorpay that also offer neobanking services.

Fintech is only the second startup sector to cross the 20 unicorns mark, after ecommerce which leads with 23 unicorn startups. Enterprisetech is on course to join this club next, with 17 unicorns from the sector.

Bengaluru Extends Unicorn Dominance

India’s 100th unicorn i.e. Open was also founded in Bengaluru and this is the 39th startup from the so-called startup capital of India to reach the $1 Bn valuation milestone. Bengaluru, which is home to India’s first unicorn InMobi, produced 17 unicorns last year alone.

Delhi-NCR is a distant second with 29 unicorns, while Mumbai is further behind with 15 unicorn startups.

Looking At The Next Unicorns

A record number of unicorns in 2021 had already set high expectations for 2022 and now, all eyes are on the next batch of startups that will make it to the unicorn club and take it beyond 100.

Like the unicorn rush, we also saw more soonicorns or potential unicorns than any year in the past in 2021. Many of the 73 startups from the soonicorn club have now graduated to unicorns. As per data in 2021, Bengaluru was home to 31 soonicorns, while 19 came from Mumbai, and 13 from Delhi-NCR.

Of course, while these soonicorn predictions were made after a heady year as far as funding is concerned, there has been a big drop-off in 2022.  In terms of funding, the month-on-month figures have declined from $4.6 Bn in January 2022 to $3.4 Bn in March and now $2.6 Bn this month. The IPO frenzy expected in 2022 has also not panned out as a response to the shifting focus of investors globally to better value bets.

We had argued earlier this month that the combination of investment slowdown and the bigger focus on corporate governance and financial practices is likely to lead to challenges for Indian startups such as layoffs, down rounds, low valuations and distress M&As. But for now, the focus will be on celebrating the 100th unicorn in the Indian startup ecosystem.

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