6 new unicorns in 4 days mark historic Indian tech boom

In rough order of size: Investment platform Groww has raised funds worth over $ 1 billion, email bot start-up Gupshup has reached $ 1.4 billion, pharmacy Digital API Holdings Pvt. was valued at nearly $ 1.5 billion, app developer Mohalla Tech topped $ 2.1 billion, social commerce startup Meesho Inc. also reached $ 2.1 billion, and the Financial technology provider Cred topped the Unicorn Blessing at $ 2.2 billion.

For context, India had a total of seven new unicorns in 2020, according to the CB Insights market research. In 2019, he had six.

Global investors such as SoftBank Group Corp. in Japan and Naspers Ltd. in South Africa see growing opportunities in the country’s startup scene. The nation of 1.3 billion people has seen the rapid adoption of smartphones in recent years, explosive growth in cheap internet services, and a new generation of ambitious entrepreneurs.

“Big funds like Naspers, SoftBank and Tiger Global have significant capital to invest and these startups are now at the top of their list,” said PN Sudarshan, partner at Deloitte.

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India has long lagged behind the United States and China in terms of venture capital invested in startups. The total value of transactions in 2020 was $ 11.8 billion, compared to $ 143 billion in the United States and $ 83 billion in China, according to researcher Preqin.

But several startups have emerged recently to signal the potential of the South Asian country. Digital payments giant Paytm has reached a valuation of $ 16 billion, making it the most valuable in the country, according to CB Insights. Online education startup Byju’s is raising $ 15 billion in cash, Bloomberg News reported last week.

Flipkart, the e-commerce giant acquired by Walmart Inc. in 2018, is targeting an initial public offering in the fourth quarter that could value the company at more than $ 35 billion.

Venture capital investments are helping to diversify the Indian industry, long known to technology service companies such as Tata Consultancy Services Ltd. and Infosys Ltd. A report by Credit Suisse Group AG last month found that there had around 100 unicorns in India with a combined market value of $ 240 billion, in industries ranging from e-commerce and fintech to education, logistics and food delivery.

“The business landscape in India is undergoing a radical change due to a remarkable confluence of changes in the financing, regulation and business environment in the country over the past two decades,” the report states. a variety of industries has resulted in an increase in the number of highly regarded companies that are not yet publicly traded. “

The Covid-19 pandemic has accelerated the adoption of online technologies in India, perhaps even more than in other countries. During last year’s coronavirus pandemic and strict lockdowns, more than 1,600 new startups were founded, bringing the country’s total to more than 12,500, according to a January report from Nasscom, the trade body of the technology industry in the country.

More than 55 of them are potential unicorns, according to the report, what the risk industry calls “soon to be unicorns.” As in Silicon Valley, executives who have gained experience in leading startups such as Flipkart and Paytm are embarking on building their own businesses. , and successful entrepreneurs are turning to their second or third startups.

“The skyrocketing funding and unicorn breeding is no surprise as India has the third largest startup ecosystem in the world and the third largest market for such startups,” said Pranav Pai, Managing Partner of 3one4 Capital Advisors LLP.

Pai said he is aware of at least six new unicorns that will be hit in the coming months. While the $ 20 million rounds were notable five years ago, startups scale very quickly and raise $ 100 million to $ 200 million these days, he said.

The average investor checks a few hundred startups each month.

“The difference is that instead of only encountering one high-quality startup among these, we now see eight to ten a month,” said the venture capitalist whose previous fund Arin Capital supported the start. -up edtech Byju’s and the newly created e-pharmacy unicorn. Many investors will see their previous bets come full circle as a dozen Indian startups prepare to hit public markets later this year or early next year.

“Such exits will further boost investor confidence, increase liquidity and fuel a new funding frenzy,” Sudarshan said.

This story was posted from an agency feed with no text editing. Only the title has been changed.

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