Freshly Minted

India is witnessing a rapid surge in the number of unicorns, with a large number of the 100-odd unicorns getting minted in the past one year. Can this growth sustain in view of the funding winter? Do lofty valuations imply inherent strength or just promise?

- Jyotsna Sharma

BACK in the day, it would take a company several years to acquire unicorn status. The story is quite different now, not only are we seeing a boom in unicorns, but the time it takes to get the unicorn tag has come down considerably. Close to 50 per cent of the companies are reaching the billion-dollar mark within five years. What is behind this accelerated pace? Is it sustainable?

Of course, these companies offer up superb services and products and have a great market strategy. Additionally, the business environment in the country with its focus on digital transformation has been conducive to their growth. Equity and affordability of data has certainly helped these businesses strengthen their foundation. Think back to a few months ago when we were in the middle of the pandemic. Startups were almost indispensable, from groceries to medical supplies, they provided everything. They innovated quickly and created offerings for every need and as a result have an extremely loyal customer base.

The year 2021 was a fascinating one in the growth story of unicorns. As per the Orios Venture Partners report, Indian startups raised $42 billion last year, with 46 of them joining the unicorn club and taking the total number to 90. The fintech sector followed by e-commerce saw the maximum number of unicorns. It has been reported that as of July 2022, India is home to 105 unicorns with a total valuation of $338.50 billion.