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India has the 3rd largest startup ecosystem in the world. India has created a thriving ecosystem for the growth of emerging companies, which has helped 115 and counting companies to become ‘Unicorn’.
A startup achieves “Unicorn” status when it reaches a valuation of over $1 billion. This valuation is typically achieved through a combination of factors, including successful fundraising rounds, revenue growth, market dominance, and investor confidence in the company’s potential for long-term success and scalability.
These startups that have attained unicorn status share several remarkable traits, including their inclination for Disruptive Innovation, pioneering role as first-movers in their respective fields, unwavering commitment to cutting-edge technology, and relentless focus on consumer needs and satisfaction.
The list of unicorns in India continues to rise, especially since the COVID-19 era. The pandemic promoted the digitalization of systems. This digitalization led to the mushrooming and profiting of these unicorn companies in India. The unicorns have brought about major changes in all sectors. The unicorn status shows the entrepreneurial life cycle and high growth rate of companies in previous years.
Top Unicorn Companies In India
The journey began with India’s first unicorn, the Indian Premier League (IPL), followed by InMobi, the first unicorn startup in India. Let’s learn more about the top unicorn companies in India.
1. Paytm
Paytm is an app that provides commerce, cloud, and financial services. It was launched in 2010 by Vijay Shekhar Sharma, and One97 Communications was its parent company. It is based on the business model of users downloading the app, using UPI to transfer money, or scanning QR codes. Now, it offers features like movie ticket booking, EMI payments, etc. Currently, it is one of the most used digital wallets in the country. In 2017, Paytm became the first payment app in the country to surpass 100 million downloads.
2. Ola
Ola has recently joined the ranks of unicorn companies in 2019 India after receiving Rs. 1,725 crores from Softbank. The company’s business model is getting a commission on ride booking and charging fees for add-on services. In 2010, Bhavish Aggarwal and Ankit Bhati founded Ola. The journey has been interesting for them. It all started with a taxi rental fleet business inspired by Bhavish Aggarwal’s personal experiences with cab drivers. With time, Ola evolved into a platform that provided a convenient way to book a cab, gradually expanding its customer base. In 2017 it introduced its subsidiary- Ola Electric. Ola Electric is a two-wheeler manufacturer based in Bengaluru. It has witnessed a tremendous jump to 1549.64%.
3. Byju’s
Byju’s is a well-known ed-tech company among students. This learning startup was founded in 2011 by Byju Raveendran. This startup focuses on making the learning process enjoyable and engaging. It followed a freemium business model, providing free and premium services to students. It was ranked the 13th largest unicorn in terms of its global valuation. Byju Raveendran was tagged as India’s youngest billionaire in the Forbes list of India’s 100 richest people. In 2020, it reached the status of a decacorn. The ed-tech company has started a fundraising round for around Rs. 5,750 crores.
4. Flipkart
Sachin Bansal founded the first e-commerce company in India. In 2007, he established a private limited company to provide an online marketplace for Indian customers. The company earns revenue through fees based on commission, financial services, advertisement, logistics, and fulfilment services. Flipkart started its journey with bookselling. Later, it diversified to sell electronic products, air conditioners, lifestyle items, and e-books. The success story continues, with Walmart acquiring a 77% stake in the company.
5. Zomato
Zomato was established in 2008 by Deepinder Goyal. Like all other startups, it has its share of ups and downs. The e-commerce platform operates in a B2B model. The main feature of this e-commerce platform is online food ordering and delivery. It allows users to view various restaurant menus and reviews and allows consumers to browse and order food directly through the app. Interestingly, it is one of the first unicorn companies in India to make its place in the stock market. Zomato’s revenue has jumped to 75%.
6. Cred
Kunal Shah founded Cred FinTech in 2018. It follows the Peer-to-Peer (P2P) model. Kunal had a particular focus on supporting the taxpayers of India. So, this platform was created to give some relaxation to taxpayers. The platform offers easy credit card payments at an interest rate of 9%. The tagline is “Suraksha aur Bharosa dono”. It highlights its commitment to ensuring secure transactions and building user trust. It has partnerships with over 2000 brands and tie-ups with over 34 banks.
7. Oyo Rooms
It was founded in 2012 by Ritesh Aggarwal. It runs on an aggregator business model. Over time, it follows a combination of aggregator and franchise business models. This has made it easy for travellers to find affordable accommodations. The multinational online travel agency provides various services, including breakfast options, holiday programs, and rewards. Oyo rooms have witnessed a 15-fold growth, with over 2.3 million bookings since 2016.
8. Razorpay
The founders of Razorpay are Harshil Mathur and Shashank Kumar, founded in 2014. The business model is based on providing online payment gateway services to businesses and charging a fee on every transaction. The main focus is simplifying payments and making them more accessible for Indian businesses. It provides online payment gateway services to businesses and charges a fee for every transaction. It collaborated with many institutions like NPCI and RBI for smooth payments.
9. Mamaearth
The company was formed in 2016 by Ghazal and Varun Alagh. They struggled to get a place in the top Indian startups. Now, it has become the topmost brand of organic products. The products have been certified by Made Safe. Based on a direct-to-consumer approach model, they started their business with Rs. 90 lakhs. The unicorn hit Rs 920 crores in 2022.
10. Blinkit
It was founded by Saurabh Kumar in 2013 and was originally known as Grofers but was revamped to Blinkit in 2021. It is based on a surge price business model and is committed to delivering your daily grocery essentials within 10 minutes. In 2022, Zomato acquired this unicorn. Blinkit is operating in 28 cities. Just swipe the order, and Blinkit ensures your groceries are delivered to your door. The tagline is #letsblinkit.
11. Lenskart
Lenskart was founded in 2010 by Peyush Bansal, Amit Chaudhary, and Sumeet Kapahi with a simple yet ambitious vision – to revolutionize the eyewear shopping experience in India. One of Lenskart’s key innovations lies in its omni-channel retail strategy, which seamlessly integrates online and offline channels to provide customers with multiple touchpoints for exploring, trying, and purchasing eyewear. In 2019, Lenskart achieved unicorn status by raising a funding round led by SoftBank, the Japanese financial conglomerate.
12. Zerodha
Founded by Nithin Kamath and Nikhil Kamath, Zerodha set out on a mission to democratize investing by providing affordable and accessible trading platforms to retail investors. This makes Zerodha famous amongst the traders and is the main reason behind Zerodha having an active client base of 6.3 million and counting. Zerodha also had the first-mover advantage as it was the first discount broker in India.
Zerodha, which entered the unicorn club in 2021, posted a total revenue of INR 2,729.6 Cr in FY21. It is among the handful of Indian startups to have entered the unicorn club without raising any money from external investors. The startup continues to remain bootstrapped, completely operating based on its earnings.
13. Nykaa
Founded by Falguni Nayar in 2012, a former investment banker turned entrepreneur, Nykaa was born out of a visionary response to the disparities observed in the Indian cosmetics market. Falguni drew inspiration from flourishing marketplaces in countries like France and Japan. These disparities became the catalyst for Nykaa.
Nykaa hit unicorn status in 2020 after raising two funding rounds in March and May from Steadview Capital, reaching $1.2 Bn in valuation. This milestone not only validates Nykaa’s disruptive business model and rapid growth trajectory but also underscores the immense potential of India’s booming beauty and e-commerce industry.
Also Read: 20+ Entrepreneurial Ideas for Students to Launch in 2023
Challenges Faced by Unicorn Companies in India
To achieve higher ranks globally, certain challenges need to be tackled by unicorn companies in India. These challenges include strict rules and regulations, intense competition, etc. Let’s understand these challenges further.
1. Regulatory challenges
Regulatory bottlenecks pose unavoidable challenges for businesses in India. Starting a business or startup is time-consuming due to strict rules and regulations. These challenges start from company registration, labour laws, and intellectual property rights to dispute regulations. This can lead to the migration of Indian unicorns abroad. This may result in economic and national loss. There is a need for updating laws to facilitate smoother processes, such as implementing a single window clearance system and simplifying labour laws to streamline operations and reduce time-consuming dispute regulations.
2. Lack of skilled workforce
India has a very refined youth demographic. The problem lies in the lack of skill in the workforce. The population is increasing along with structural unemployment. The current unskilled workforce is incompatible with the new digital technologies due to a lack of required skills. The workforce may turn into a liability.
3. Intense competition
Charles Darwin has rightly claimed the theory of ‘survival of the fittest’. The intense competition among unicorns worldwide can have advantages and disadvantages. Lack of proper guidance and good branding strategies can make the survival of unicorns difficult.
4. Funding challenges
The funding challenge can destroy the potential of upcoming unicorns. At the same time, some initial funding options are available such as support from family, and friends, angel funding, venture capitalists, and crowdfunding. But the demand for finance increases with progress. Lack of funds can result in infrastructure shortcomings and, ultimately, risk of failure.
Future of Unicorn Companies in India
The unicorn companies of India require effective solutions to overcome their challenges for a bright future. These solutions can be achieved with the help of the involvement of all benefitted stakeholders.
Growth Prospects of Unicorn Companies in India
India has emerged as a global hub for unicorn companies, with approximately 1 out of every 10 unicorns born here. This signifies the high growth potential. India has achieved the target of over 100 total unicorns in India with a combined valuation of more than Rs. 24,800 crores.
India has gained the third rank globally in the number of unicorns. Bengaluru is regarded as the unicorn capital of India, hosting a total of 46 unicorns. Unicorns are gaining ‘Decacorn‘ status. Decacorn status is given to companies with valuations of Rs. 82600 crores.
More decacorns like Flipkart, BYJU, Nykaa, and Swiggy will likely be recognised by India. Twenty-four latest unicorns in India have been added this year. Growth prospects extend gender equality, wherein more women are taking part in the unicorn companies of India. They also include economic development, technological development and the inculcation of a culture of innovation among the Indians.
Emerging Sectors for Unicorn Companies in India
Gone are the days when e-commerce sectors were the only unicorn companies in India. Various sectors are emerging into the startup business, witnessing the rise of unicorn companies. These sectors include real estate, clean tech, transport, travel, healthcare, logistics, ed-tech, enterprise tech, fintech etc.
Physics Wallah and BYJUs are among such ed-tech companies. The journey of Indian startups has come a long way, with involvement in almost all sectors. You may have heard about the boAt and wondered- Is boAt a unicorn? The answer is no; it is a startup company, and not all startups are considered unicorns. Those companies that fulfil the criteria gain the status.
Government Initiatives to Support Unicorn Companies in India
The government is trying to promote unicorn companies in India at national and international levels. Several schemes have been launched. One such initiative is Startup India which gives 3-year tax compliance breaks to reduce regulatory frameworks and red tape. Through the Self Employment and Talent Utilisation (SETU) fund, the government intends to allot Rs. 1,000 crores for self-employment and technology-driven jobs.
The Startup India Seed Fund scheme provides easy availability of capital to entrepreneurs at an early stage. Atal Innovation Mission guides innovators to become successful entrepreneurs. Mentorship, Advisory, Assistance, Resilience, and Growth (MAARG) is a one-stop platform. Here, startups and mentors connect.
Unicorn Startup in India: Impact on the Economy
Startup Culture and Entrepreneurship can have significant impacts on a developing nation like India in several ways:
1. Job Creation
Startups are often significant contributors to job creation, especially in sectors like technology, e-commerce, and services. In a country with a large population like India, where unemployment can be a significant challenge, startups can provide employment opportunities for youth and skilled professionals.
2. Innovation
Entrepreneurial Mindset fosters innovation by encouraging individuals to come up with creative solutions to existing problems. In India, startups are addressing various challenges such as healthcare accessibility, education, agriculture, and infrastructure through innovative technologies and business models.
3. Economic Growth
A thriving startup ecosystem can contribute to overall economic growth by attracting investments, generating revenue, and increasing exports. Startups bring dynamism to the economy and can drive competitiveness, which is crucial for a developing nation like India to stay relevant in the global market.
4. Skill Development
Startups often require employees to wear multiple hats and work in dynamic environments, fostering a culture of continuous learning and skill development. This can help bridge the skill gap in the workforce and equip individuals with the skills needed for the future economy.
Industries such as e-commerce, fintech, ed-tech, health tech, and transportation, led by these unicorn startups, are undergoing a profound transformation, reshaping traditional business models and leading the charge in the digital revolution.
Journey Ahead
Our country has made a definite place with growing trends of startups and unicorn companies in India. Achieving unicorn ranks by startups is beneficial for both the overall development of the country as well as the business sector. This will lead to a rise in Gross Domestic Product (GDP), a social sector boost, and non-traditional employment opportunities.
Conversion of unicorn companies to decacorns requires support from the government. This support can be extended by spreading awareness about startups and entrepreneurship from primary school levels.
Innovative, low-investment ideas for the hidden entrepreneur in you! Explore our guide on Business Ideas.
Frequently Asked Questions (FAQ)
A startup achieves “Unicorn” status when it reaches a valuation of over $1 billion. The emergence of unicorn companies in India is one of the biggest achievements of our country. India has 115 unicorns in total. India has attained the third rank in the world for having a suitable ecosystem for the growth of unicorn companies in India.
Paytm, Flipkart, Ola, BYJU’s, Oyo Rooms, Zomato, Cred, and Razorpay are some top Unicorn companies in India. They have made their special mark through their inspiring journey and contribute to all aspects of the development of a country, like economic and social development. They all have gained a major valuation in the past few years.
InMobi gained the title of the first Unicorn in India in 2011. It is a multinational mobile advertising technology company. The headquarters is in Bengaluru. It allows the advertisers to engage for the first time with the consumers through mobile. Through this, advertisers can identify and engage with the best customers and gain profits.
The government has taken several steps like Startup India, SEED fund, MAARG scheme, SETU fund, and Atal Innovation Mission to promote startups in India. Government intervention through these schemes has allowed the startups to reach the position of unicorns. These initiatives have promoted startups and unicorns in the right direction.
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