Attracted by the explosive growth of the Indian startup ecosystem, several new creatures are arriving at the country’s shores—straight from Silicon Valley.
Several unicorns, ponies and centaurs are already here, and entrepreneurs and investors are now waiting for decacorns and dragons.
No, this isn’t a fantasy land.
These terms—derived from Dungeons & Dragons, a fantasy tabletop role-playing game first published in 1974—are commonly used in the Silicon Valley to classify startups based on their valuations. As Indian startups gain scale and volume, the words are increasingly making their way into the vocabularies of Indian investors and media.
But since some of these terms might mystify those who do not belong to the startup ecosystem, Quartz has prepared a brief guide here:
Pony: Coined by Dave McClure, founding partner at investor 500 Startups, this term is used for a company that is worth less than $100 million (Rs648.95 crore).
Centaur: In Greek mythology, a centaur is a creature with a human torso and legs of a horse. In the startup world, the term is used for a company that is valued at over $100 million but less than $1 billion. India has a growing number of such mid-size startups like Housing.com and Groffers.
Dragon: This term is used for a startup that raises $1 billion from investors in a single round. Globally, there are only six companies that have made it to the dragon club, which includes Indian e-commerce major Flipkart. In July 2014, the Bengaluru-based company raised $1 billion in a single round from Tiger Global Management, GIC, Naspers, Accel Partners and Morgan Stanley Investment Management. Several Indian startups—like mobile payments platform Paytm, online retailer Snapdeal, and taxi aggregator Ola—may soon enter the dragon club.
Unicorn: Technology startups valued over $1 billion fall in this category. There are 140 unicorns globally, with a cumulative valuation of $503 billion (Rs32.6 lakh crore), according to New York-based venture capital database CB Insights.
Indian startups do not officially disclose their valuations, but as per CB Insights, the country has seven unicorns—third only after the US (85) and China (22). Indian unicorns include Flipkart, Snapdeal, Ola, Paytm, MuSigma, Zomato and Quikr.
Decacorn: A decacorn is a startup that is valued at $10 billion or more. The term was first used by Bloomberg in March this year. Uber, Airbnb, Dropbox and Snapchat are some of the US-based decacorns. India so far has only one company in this category—Flipkart.
|Pony||Under $100 million|
|Centaur||Over $100 million but less than $1 billion|
|Unicorn||$1 billion to $10 billion|
|Decacorn||$10 billion or more|
What’s the significance?
These titles may sound sassy, but they do not have much value.
“These are just aspirational terms and don’t mean anything,” Sanat Rao of software industry think tank iSPIRT, who works with Indian startups on global mergers and acquisitions, told Quartz. “I don’t think any investor would make much of these categories while making investment decisions.”
Even entrepreneurs believe these terms do not convey much and the focus of a business should be to build a scalable and profitable model. “My decisions are not driven by my desire to have any such titles,” Ambareesh Murty, founder and CEO of online furniture retailer Pepperfry.com, told Quartz. “These terms are interesting and make for good reading, but I would not chase them.”
Brand consultant Harish Bijoor agrees. “This is just some startup fun and play. They could call themselves dogs or cats or hyenas or any other animal, what difference would it make?” Bijoor told Quartz.