2020 In Review: 11 Indian Startups That Defied The Pandemic To Enter The Unicorn Club

In a recession-like year, when the revenue crunch caused by the Covid-19 pandemic and the resultant lockdown was often talked about in business circles, some Indian startups managed to weather the storm, post impressive revenue figures and raise funding to gain a valuation of more than $1 Bn and enter the unicorn club.

In all, 11 Indian startups —  Unacademy, Pine Labs, FirstCry, Zenoti, Nykaa, Postman, Zerodha, Razorpay, Cars24, Dailyhunt and Glance — became unicorns this year. As experts have pointed out, the core propositions of these startups were ones that actually solved challenges for individuals and businesses during the lockdown for a large portion of the year. 

With schools yet to reopen, online learning continues to be on the rise and the boom in valuation for Unacademy was no surprise given that it had already set a good pace in 2019 and had caught the VC eye. While students looked at catching up on test prep work, those working from home also looked to upskill themselves, which gave another shot in the arm for edtech products. 

Fintech apps such as Razorpay and Pine Labs boomed as online transactions for ecommerce and hyperlocal services grew and contactless digital payments and even retailers jumped on to contactless payments. The digital payments boom has been evidenced by the rapidly climbing UPI numbers since April this year. In November, the UPI transactions grew to 2.2 Bn after crossing the 2 Bn mark the month before.

With the exception of Pine Labs, all the unicorns this year have been founded after 2009. On average, it took the 10 startups (excluding Pine Labs), 7.3 years to reach the unicorn club. Founded in 2018, InMobi subsidiary Glance is the fastest to reach the billion-dollar valuation, while Dailyhunt is the first Indian startup with a vernacular focus to reach the hallowed mark.

With more focus on investments given the liquidity crunch, Zerodha came into the picture and its already solid growth in the past few years. Let’s take a look at how each new startup this year in the unicorn club got there. 

Unacademy

With its Series F funding round worth $150 Mn, led by Japanese multinational conglomerate SoftBank, Bengaluru-headquartered edtech startup Unacademy joined its compatriot BYJU’S in the unicorn club in September this year. With the funding round, Unacademy’s valuation climbed from $510 Mn to $1.45 Bn.

Founded in 2015 by Gaurav Munjal, Hemesh Singh, Roman Saini and Sachin Gupta, Unacademy claims to have 30 Mn registered users and around 3,50,000 paying subscribers. The startup’s core product targets the K12 segment and it also offers lessons for competitive exams preparation. In recent times, Unacademy has also begun offering lessons on skill development and chess. The startup has also invested in creating various channels for free learning on YouTube, which are a major acquisition source. 

Last month, the edtech startup raised an undisclosed amount in an investment round from Tiger Global Management and Dragoneer Investment Group. With the investment, Unacademy’s valuation rose to $2 Bn. 

The year also saw Unacademy become an official partner for the Indian Premier League (IPL) 2020, and join several other Indian startups, such as BYJU’S, Dream11 and Mobile Premier League (MPL) as backers of the popular cricket competition.

Razorpay

Bengaluru-based payments gateway Razorpay entered the unicorn club in October this year when it raised $100 Mn in its Series D round, led by GIC and Sequoia Capital India. 

The funding round also saw participation from the company’s existing investors, such as Ribbit Capital, Tiger Global, Y Combinator and Matrix Partners. 

The company said that it would use the funds to launch products for its neo-banking business, Razorpay X and lending business Razorpay Capital, seeking to double their growth in the coming year. It also plans to hire 500 people across functions of growth, product and technology.

Besides Razorpay, other fintech firms such as online payment gateway BillDesk, point-of-sale and merchant commerce solution Pine Labs, Flipkart-owned PhonePe and insurtech startup PolicyBazaar, are also unicorns. 

Founded by Shashank Kumar and Harshil Mathur in 2014, as a payment gateway service, Razorpay currently powers digital payments for over 200K small and large businesses, including Airtel, BookMyShow, IRCTC, Aditya Birla Capital, NSE, among others.

Pine Labs

Noida-headquartered Pine Labs became the first unicorn for this year, after its corporate round in January, led by New York-based financial services major Mastercard. Reports at the time suggested that Pine Labs’ valuation for the round was close to $1.6 Bn. 

Founded in 1998 by Lokvir Kapoor, Pine Labs, as of 2019, provided its services to over 100K merchants in 3700 cities and towns across India. In March 2019, the Google Pay had also collaborated with Pine Labs to enable offline transactions on Google Pay through Pine Labs’ Unified Payments Interface (UPI)-based digital payments product.

Pine Labs enables online and offline retail transactions. It claims to process $30 Bn payments per year. 

Nykaa

Mumbai-based omnichannel lifestyle retailer Nykaa entered the unicorn club in April this year, after raising around $13.6 Mn from its existing backer Steadview Capital. The funds were raised as part of Nykaa’s Series F funding round. 

Founded by Falguni Nayar in 2012, Nykaa is an online marketplace for beauty and wellness products. The company started its offline operation in 2015 and currently has over 70 stores, housing luxury brands such as Tom Ford, Jo Malone London, Dior and Givenchy. The company plans to expand to a further 40 stores in the coming years. It claims that it’s been fulfilling nearly 1.5 Mn orders a month, offering over 1.5K brands and 130K products.

In the recent past, the company also raised funds from Bollywood actors Alia Bhatt and Katrina Kaif. In the fiscal year 2019-20 (FY20), Nykaa claimed to have recorded a revenue of INR 1,860 Cr with an EBITDA (earnings before interest, taxes, depreciation, and amortisation) of INR 94 Cr. 

Zerodha 

Bootstrapped stock trading platform Zerodha claimed a unicorn valuation in its employee stock ownership plan (ESOP) buyback offer in June this year. The investment platform claimed that it would spend INR 60 Cr to INR 65 Cr to buy back ESOPs from senior management and long-term staffers and offer liquidity options in its 10th year. With this, the company valued itself at INR 7000 Cr (roughly $1 Bn).

Bengaluru-based Zerodha was founded in 2010 by Nithin and Nikhil Kamath and offers stockbroking services. The company has claimed to have over a million active clients who trade and invest and said that it used to witness more than 15 lakh revenue-generating trades daily in the pre-Covid times.

In interviews, the company’s founder has said that until January, over 70K to 1 Lakh customers were signing up on Zerodha every month. However, in March, almost 3 Lakh customers signed up for stock broking through the platform.

While the company valued itself at $1 Bn, it was subsequently valued at $3 Bn just two months later in the Hurun Global Unicorn List 2020. 

Postman

Bengaluru-based SaaS startup Postman jumped from a valuation of $350 Mn in 2019 to nearly $2 Bn for its Series C funding round worth $150 Mn in June this year. The funding round was led by New York-based investment fund Insight Partners. 

Founded in 2014 by Abhinav Asthana, Abhijit Kane, and Ankit Sobti, Postman helps developers and companies supercharge their application programming interface (API) workflow. Its extension on Chrome is the most efficient way to test, develop, and document APIs. The startup also helps to create complex requests, go back in time, and view results easily. 

With its Series C round, Postman joined the Indian SaaS unicorn club which includes the likes of Zoho, Freshworks, Icertis and Druva. 

Zenoti

US-headquartered spa and salon software startup Zenoti entered the unicorn club this year when it raised $160 Mn in a Series D funding round, led by Advent International (Advent) through Advent Tech and Sunley House Capital. The round also saw participation from Tiger Global Management and Steadview Partners.

Founded in 2010 by Sudheer Koneru and Dheeraj Koneru, Zenoti is an all-in-one, cloud-based software for salons, spas, and medi-spas. It boasts of rich capabilities across appointment scheduling, online booking, billing, built-in marketing, inventory management, CRM, and loyalty features.

It is worth noting that Zenoti is the first vertical SaaS startup to enter India’s unicorn club of startups. Vertical SaaS startups cater to a niche user segment, as opposed to horizontal SaaS startups. 

Zenoti cofounder Koneru told Inc42 that the company will be looking to increase its workforce from 580 to 900 by next year, by hiring across the board with a deeper emphasis on core engineering or product roles. This plan will be in lines with Zenoti’s efforts to double its revenue in 2021. Besides this, the company will also expand its latest offerings in fitness and pet grooming or spas.

Cars24

Gurugram-based online used car marketplace Cars24 entered the unicorn club last month by raising $200 Mn in a Series E funding round led by DST Global.

Existing investors Exor Seeds, Moore Strategic Venture and Unbound also participated in the round that valued the company above $1 Bn. Cars24 will use the funding to invest aggressively in technology and product innovation and scale new business verticals.

Founded in 2015 by Vikram Chopra, Gajendra Jangid, Ruchit Agarwal and Mehul Agrawal, Cars24 claims to create an efficient and reliable way for car owners to sell their used cars at the best price. A consumer can simply book an appointment with any of the Cars24 branches, visit the branch and sell a car in a single visit.

The company has expanded its presence through the franchise model and intends to scale up its presence from 130 cities to over 300 Tier II, III and IV cities and towns by 2021. At present, it claims to have over 10,000 channel partners registered on its platform and intends to increase the network to more than 20,000 partners by next year.

FirstCry

Pune-based baby products marketplace Firstcry, entered the unicorn club in February this year when it raised $296 Mn (INR 2120 Cr) Series E funding from Japan-based marquee investor Softbank’s Vision Fund.

The investment is believed to be the first tranche of the total $400 Mn funding which has been committed by Softbank, according to the company’s filings with the Ministry of Corporate Affairs (MCA).

According to media reports at the time, the funding round took the company’s valuation to $1.2 Bn. 

Founded in 2010 by Supam Maheshwari and Amitava Saha, Firstcry offers different categories of baby and kids products from clothing to school essentials. The company has expanded its user base to over 4 Mn and has a retail footprint of over 300 stores spread across 125 cities. It claims to offer 2 Lakh baby and kids products across 2,000 brands.

Dailyhunt

News and content aggregator Dailyhunt has become India’s first tech unicorn focused on vernacular content after raising $100 Mn funding from Google, Microsoft and Falcon Edge’s Alpha Wave Incubation at a unicorn valuation. Existing investors Sofina Group and Lupa Systems also participated in this round.

Dailyhunt will use this funding to scale up its recently launched short video app Josh, further develop its content creator ecosystem and double down on its artificial intelligence and machine learning push for content discovery and recommendations.

The company has raised about $240 Mn till date. Earlier this year, the company raised about $10 Mn (INR 73 Cr) in primary capital from B Capital. It planned to use the funding to rework its ownership structure after the Indian government reiterated its decision of capping the foreign investment for digital media entities at 26% by October 2021.

Founded in 2009 as Newshunt, the Bengaluru-headquartered startup began as a news aggregator. It was acquired by jobs classified company VerSe Innovation in 2012. Later in August 2015, NewsHunt rebranded itself to Dailyhunt to offer news in vernacular languages.

As of April 2020, Dailyhunt claimed to have more than 1,300 publication partners, providing 2,50,000 news and content pieces every day in 14 languages, which include multiple regional languages such as Marathi, Gujarati, Tamil and Bhojpuri.

Dailyhunt claims to have more than 263 Mn monthly active users across all platforms, with 208 Mn monthly active users on its app. The company has over 500 employees.

Glance

Glance, owned by adtech unicorn InMobi, has reportedly entered the unicorn club after it received a $145 Mn investment from Google and existing investor Mithril Capital. Glance owns and operates the Indian short-video content platform Roposo besides its own lock screen content product.

In September, Naveen Tewari, founder and CEO of InMobi had said, “We believe the valuation of InMobi’s B2C business is certainly beyond that of a unicorn. And in the coming fundraise, it will definitely be valued over $1 Bn; we are clear about it.”

Tewari had said then that Glance would raise funds in the coming six months. It was reported at the time that the funding round could be worth up to $100 Mn.

Glance delivers AI-driven personalised content in multiple languages including English, Hindi, Tamil, Telugu and Bahasa on the lock screen of Android smartphones. The content includes trending news, across a range of categories such as entertainment, sports, fashion and news, and is delivered in a visually rich format. It claims to have 115 Mn daily active users (DAUs) who spend 25 minutes per day consuming Glance’s content.

Roposo, which was acquired by Glance in November 2019, is one of the many short video content platforms in India, which gained prominence after Bytedance-owned TikTok was banned in the country in late-June this year. It claims to have 33 Mn monthly active users who spend 20 minutes daily consuming content across multiple genres in more than 10 languages. The Roposo app has more than 100 Mn downloads on the Google Play Store.

Glance has raised $190 Mn till date from two funding rounds. Its last funding round was a venture round worth $45 Mn, led by Mithril Capital Management.

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