“Hiring was a massive challenge,” recalls Raghunandan G, who cofounded the Bangalore-based ride-sharing aggregator TaxiForSure in 2011, four years after finishing his MBA at the Indian Institute of Management. “My business school classmates all had education loans. The guys from engineering school were married, and had housing loans. Startups were seen as incredibly risky.” Even friends who believed in him and his idea were reluctant to come on board.
Around the same time, Bhavish Aggarwal, an Indian Institute of Technology (IIT) graduate, was bringing another ride-sharing aggregator called Ola to life. In 2010, as a staff researcher for Microsoft, he had rented a car to take him to Bandipur National Park. Midway there, the driver decided to renegotiate the rate. Aggarwal argued, and the driver forced him out of the car and drove away. With fellow IIT graduate Ankit Bhati, he opened a ride-sharing business based in Mumbai, which they named Ola. As he later told the Economic Times, when his parents heard the plan, they asked why he would quit Microsoft to become a travel agent.
What a difference a few years can make. Aggarwal is now one of the bestknown entrepreneurs in India. His company, which relocated to Bangalore, became a unicorn in September 2018, and is now valued at $5 billion. In July 2019, it spun off another unicorn, the electric vehicle manufacturer Ola Electric, with a Softbank investment of $250 million, a $1 billion valuation, and a high level of entrepreneurial confidence. “We are a very experimental company,” Aggarwal told an interviewer in 2019. “We let our employees take risks. If we fail, so what? We will succeed at something.”
As for Raghunandan G, he is now an angel investor, funding and advising other fast-growing startups. He took up this role after selling TaxiForSure to Ola in 2015 for $200 million. (The shares he received in Ola ultimately turned out to be worth about $19 million.)
Similar stories of rapid riches are being told throughout India. Indeed, the rise of unicorns in this country is not just a boon for those who have invested in them. It’s increasingly seen as a sign that the Indian economy is reaching a turning point and that its entrepreneurial culture is maturing.
Ola, for example, was one of 11 Indian companies that became unicorns in 2018 — more than in all previous years combined. Other members of the class of 2018 include online insurance company Policy Bazaar, hospitality company OYO, and B2B software-as-a-service (SaaS) company Freshworks. That year also marked the biggest e-commerce deal in the world to date. Walmart paid $16 billion to acquire a 77 percent share of the Bangalore-based shopping site Flipkart, which had been founded in 2007 by two former Amazon employees, had become Amazon’s fiercest rival in India, and had gained unicorn status in 2012. This acquisition also signified the largest exit for venture capital and private equity firms in India to date; their combined return on investment amounted to $14 billion, while Flipkart’s valuation rose to $22 billion. The first three quarters of 2019 have already witnessed the emergence of another eight unicorns (see table, next page). Udaan, a B2B e-commerce platform, gained unicorn status just two years after its inception, and that may be the pattern in the future: There are many more “soonicorns” in the wings.
The emergence of Indian unicorns is best understood as a new force in the global economy. According to Indian Tech Startup Ecosystem: Approaching Escape Velocity — a 2018 report by the Indian tech industry association Nasscom — India is the third-largest startup ecosystem in the world. The number of tech startups reached 7,500 in 2018, a growth of 12 to 15 percent from 2017. Many of these were advanced technology startups; companies involving data analytics, artificial intelligence, and the Internet of Things experienced the fastest growth.
“The Indian startup ecosystem is approaching escape velocity, and is setting itself up for a period of sustained growth,” said the Nasscom report. Since then, startup activity has accelerated, along with financing from venture capitalists, private equity firms, and incubators (see “The incubator opportunity,” above). For example, the number of late-stage deals in the first eight months of 2019 has surpassed those of the previous two years. Global tech incubator Y Combinator has funded 12 Indian startups in 2019, compared with five in 2018, while investment applications from Indian companies increased by 50 percent. In a recent interview with the Times of India, Y Combinator president Geoff Ralston said he expected to fund a larger percentage of Indian unicorns in future years. “We think the opportunity represented by Indian startups and founders is enormous,” he said. “It’s because of multiple reasons — one being that there are really smart people, the founders.”
One striking aspect of the tech startups in India today is their ambition for expansion elsewhere in the world. Like their counterparts in China, they recognize that if they can rapidly build a business at home, they can compete elsewhere as well. Indian startups also have some distinctive advantages: overall familiarity with the English language, few restrictions on investment and partnership, a long-standing precedent for inexpensive innovation in the IT services industry, and a large diaspora of technology-savvy emigrants who succeeded overseas and may be ready to return.
Some Indian unicorns are already building a global presence. With funding from Softbank and Airbnb, lodging aggregator OYO (originally called Oyo Rooms) has moved into more than 500 Asian cities in countries such as China, Japan, Malaysia, and the Philippines. In the U.S., according to the Financial Times, OYO is opening an average of one hotel per day, and plans to invest $300 million for further expansion. The six-year-old startup is also aggressively expanding to offer shared working and living spaces. Its acquisition of the Indian coworking space company Innov8 (reportedly for $30 million) was an early step in that direction. Within OYO, Innov8 is still run as an independent business by its 30-year-old founder, Ritesh Malik.
Continue reading your story on the app
Continue reading your story in the magazine
Transforming information into insight
Focus on six organizational elements to build a world-class data and insights capability.
THE URGENT NEED FOR SOPHISTICATED LEADERSHIP
The pandemic has highlighted a series of paradoxes inherent to the work of leaders. What comes next will depend on how well leaders face up to them.
The road to successful change is lined with trade-offs
Rather than trying to convince people your change initiative is the right one, invite them to talk openly about what it might take to implement it: the good, the bad, and the frustrating.
Sustaining productivity virtually
Maintaining productivity levels among remote employees is an enduring challenge. Here are five ways to help businesses and employees thrive while people work at home.
FORWARD TO normal
Entertainment and media companies are building business models that are resilient to the enduring changes in consumer behavior ushered in by COVID-19.
How leaders can promote racial justice in the workplace
Embrace four principles to turn today’s diversity, equity, and inclusion initiatives into sustained progress.
CREATING THE OFFICE OF THE FUTURE
In a remodeled world, it is vital for companies to reinvent ways of working.
Consumer companies must take leaps, not steps
As shoppers show how quickly they can adapt to external shocks, retailers will need to radically reconfigure their business models.
Businesses can fast-track innovation to help during a crisis
“Unrealistic” timelines can actually work. Here’s how.
Agility and experience management work better together
Many companies achieve early wins with separate transformational efforts, then stall. But if combined and enhanced using “return on experience,” or ROX, measures, these two programs can unlock each other’s potential.
Women & Spirituality
MIRABAI BUSH is the author of Working With Mindfulness, co-creator of Google’s “Search Inside Yourself” program, cofounder of the Center for Contemplative Mind and Society and a founding board member of the Seva Foundation. She teaches contemplative practices, and has facilitated retreats, workshops and courses on spirit and action for over 20 years. To commemorate International Women’s Day, Mirabai spoke with PURNIMA RAMAKRISHNAN on March 6, 2021.
Reincarnation And Realpolitik
China, India, and the U.S. are vying to influence the selection of the next Dalai Lama
An Exclusive Interview With Nandakumar Narasimhan
The Little Red Train
A Room for Dad
Before Mom passed, I made a promise to her
THE DANGAL IN THE JUNGLE, PART 1
YOU KNOW YOU’RE SOMEBODY WHEN YOU’VE APPEARED ON AN INDIAN DANGAL POSTER — IN OTHER WORDS, IN A WRESTLING ADVERTISEMENT.
WOUNDS AND THE WOMB
JULIE PETERS explores how to heal a relationship with the sacred womb, a place of death, life, and possibilities.
Giant squirrels, giant lessons? Animal chaplain SARAH BOWEN explores what squirrels can show us about mindfulness.
E8 Caste and the Indian Tech Ivies
IIT grads are highly sought after in Silicon Valley. Are they bringing deep-rooted prejudices with them?
I was happily married, happily employed, just plain happy. Until the accident
IN SEASON Chickpeas (GARBANZO BEANS)
Chickpeas appear in early recordings in Turkey well over 5000 years ago. India produces the most chickpeas worldwide but they are grown in more than 50 countries. An excellent source of carbohydrates, protein, fiber, B vitamins, and some minerals, they are a nutritious staple of many diets. The name chickpea comes from the Latin word cancer, referring to the plant family of legumes, Fabaceae. It is also known by its popular Spanish-derived name, the garbanzo bean. Kidney beans, black beans, lima beans, and peanuts are other familiar foods found in this legume family.