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A reveller, dressed as a unicorn, celebrates the sunrise during the winter solstice at Stonehenge on Salisbury Plain in southern England
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On a ride.
STARTUP MILESTONES

2018 saw a whole new breed of Indian startup unicorns emerge

One of India’s newest unicorns—startups valued at over $1 billion (over Rs7,000 crore)—is unstoppable.

On Dec. 17, ed-tech startup Byju’s said it has raised $540 million at a reported valuation of $3.6 billion. This funding comes just nine months after the company crossed that $1 billion figure, following a share allotment to its investors.

The company is backed by some well-known investors including Tencent, Sequoia Capital, Lightspeed Venture Partners, and South Africa’s Naspers Ventures.

Byju’s meteoric rise to the unicorn club is not a one-off case from India; in 2018 alone, seven others did too.

Now, the average time taken by a startup to attain a billion-dollar valuation in India has come down to between five and seven years, lower than the seven to eight years in the US. However, India still lags China’s four to five years, according to Nasscom.

Here’s a look at Indian startups that became unicorns in 2018.

Zomato

In February this year, the 10-year-old food tech company became a unicorn when it raised $200 million at a valuation of $1.1 billion.

The surge in Zomato’s valuation followed its diversification into the food-delivery space in 2015 after operating as a restaurant-search and discovery service for seven years since its inception in 2008.

At the beginning of 2018, the company had delivery capabilities in just 15 Indian cities; now it is present in more than 100 cities, the company said. Over the course of the year, Zomto acquired at least two startups to strengthened its delivery fleet: TongueStun, an aggregator of caterers and restaurants for office canteens, for $18 million, and TechEagle, a drone startup, for an undisclosed amount.

Consequently, the number of orders that Zomato delivers also jumped to 22 million a month from 3.5 million at the beginning of 2018.

The company has also launched several other services and products that could help it earn more revenue and build a loyal customer base. For instance, in November 2017, it launched a loyalty programme called Zomato Gold and already has 1,60,000 subscribers for it. There is also a waitlist for Zomato Gold, hovering at 5,00,000 users, the company wrote in a blog.

Swiggy

In June, food-delivery startup Swiggy entered the unicorn club when it raised $210 million in a funding round led by Naspers and DST Global. The company was reportedly valued at $1.3 billion at the time.

This made four-year-old Swiggy the fastest Indian startup to achieve the status at the time. In comparison, India’s most-valued unicorn, Flipkart, took six years.

In August, the company acquired Mumbai-based on-demand delivery firm Scootsy for around $8 million to further strengthen its position.

In addition, it expanded outside of its core food-delivery business when it bought Mumbai-based milk-delivery company SuprDaily in September. Swiggy is reportedly aiming to pool in other capabilities to become a concierge service, and SuprDaily is a move in that direction.

Policy Bazaar

The online insurance aggregator turned unicorn in June after it raised $200 million from Softbank. At the time of the funding announcement, founder Yashish Dahiya said most of the money will be used to scale its new telemedicine business, DocPrime, which will also act as a cross-selling platform for PolicyBazaar and PaisaBazaar, the group’s lending arm.

The 10-year-old company, which hopes to go for an IPO in the future, plans to expand its health care offering further. It plans to launch a platform that will give consumers free access to doctors and medical consultants, and a range of other offerings like in-hospital concierge and subscription services for its health insurance customers. 

Paytm Mall

Online retailer Paytm Mall, which was spun out of India’s largest digital payments firm Paytm in 2016, has been a unicorn since March this year.

In April, it raised $450 million in a deal that reportedly valued the company at over $1 billion. The company is using these funds to improve technology for its sellers and buyers. It has also launched other new initiatives in recent months, including a QR-code model to allow customers to walk into an offline store, scan the product, browse information, and make purchases online via the Paytm Mall app.

The company had earlier said that it looks to achieve $10 billion in gross merchandise volume, or the total amount of goods sold, by the end of March 2019. 

Freshworks

After the pioneering software provider Zoho, Chennai-based Freshworks is the only other Indian software-as-a-service (SaaS) company to achieve unicorn status. In August, the company achieved the $1-billion valuation after it received $100 million in investment from Sequoia Capital, Accel Partners, and CapitalG. 

The cash infusion is primarily being deployed for its global expansion. Freshworks already has over 1,50,000 clients across 127 countries. These include Honda, Hugo Boss, Toshiba, and Cisco, among others.

At the time of the fund-raising, the company announced a star hire. Suresh Seshadri, a former senior executive at US-based software company AppDynamics, joined Freshworks as its CFO. Seshadri’s appointment is expected to lead Freshworks’ to a stellar IPO debut.

OYO

The hotel aggregator became a unicorn in September when it said it was raising $1 billion from existing investors SoftBank Vision Fund, Sequoia Capital, and Lightspeed Venture Partners. The three have already pumped in $800 million with a promise to invest $200 million more.

The funding gave the company the boost to implement its global expansion plans outside India into China, west Asia, and other markets. It is investing close to $600 million in China alone.

OYO plans to expand its presence in south-east Asia and sees west Asia and parts of Europe as potential new markets. It already has a footprint across Malaysia, Nepal, and the UK.

The company diversified into other offerings during 2017 and 2018, adding OYO Home for short-term rentals, OYO Townhouse as its premium offering and Palette Resorts. More recently, the company forayed into India’s $40 billion wedding-management industry with the acquisition of Weddingz.in.

Udaan

B2B online marketplace, Udaan, founded by three ex-Flipkartians—Sujeet Kumar, Vaibhav Gupta, and Amod Malviya—achieved the unicorn status within just two years of inception.

The company raised $225 million in September from DST Global and Lightspeed Venture Partners. This was the second funding round for Udaan in a single year. It had raised $50 million in series B funding in February 2018.

Udaan is a web platform that connects small businesses with wholesalers and manufacturers, traders, and retailers. It currently has a presence in two categories, mobile accessories and fashion products, and is looking to expand its portfolio. The company has a seller base in over 80 cities and delivers to more than 500 cities.

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