Indian startups are becoming unicorns faster than before

Getting there.
Getting there.
Image: REUTERS/Mike Blake
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Indian startups are reaching the aspirational unicorn status much faster than before.

Over the last decade, the average time an Indian startup took to become a unicorn was eight years, according to the Indian Tech Unicorn Report 2020 by Orios Venture Partners.

In comparison, older tech firms such as jobs portal (founded in April 1997) and travel company MakeMyTrip (April 2000) took more than 14 years each to achieve unicorn status while e-tailer Flipkart (October 2007), insurance aggregator Policy Bazaar (June 2008), and restaurant discovery and delivery platform Zomato (July 2008) took an average of 8.7 years.

Some of the examples of newer startups becoming unicorns faster are beauty e-tailer Nykaa (April 2012) and hotels chain Oyo (May 2013), which took less time at six years to get there. And B2B e-commerce startup Udaan (November 2016) and Ola Electric (February 2017) took just three years.

The reason for this trend, the report said, was that increasingly, the founders of newer startups had prior experience of working with or running a young company. “The trend that is noticeable here is that time has been reducing, as founders with prior founding or startup experience are coming into play,” the report noted.

Who are the founders?

India’s startup scene is dominated by techies.

Over 86% of startup founders in the country are engineers, the report found. “IITs are the most common institutions,” it added.

Some notable Indian Institute of Technology alumni include Sachin Bansal and Binny Bansal of Flipkart, Snapdeal’s Rohit Bansal, and Bhavish Aggarwal and Ankit Bhati of Ola. Zomato, Quikr, InMobi—they’re all led by IIT graduates.

India’s startup unicorns

Together, the 44 unicorns that have emerged in India over the last decade have cumulatively created $106 billion value for the country’s startup ecosystem. They’ve also created over 1.4 million jobs annually.

“Our report shows that the Indian startup ecosystem has generated tremendous value for founders, employees, investors, and the economy,” said Rehan Yar Khan, managing partner at Orios Venture Partners.

Three of the unicorns in the country—online travel agent MakeMyTrip, local search platform JustDial, and jobs portal—have already been listed while India’s biggest homegrown online retailer Flipkart was acquired by American retail giant Walmart in 2018.

Despite the many popular e-commerce brands founded in India, it’s fintech that has seen the most unicorns so far.

The bulk of these burgeoning businesses have roots in India’s Silicon Valley, Bengaluru. National capital New Delhi is the next-preferred location among entrepreneurs, and commercial capital Mumbai is a distant third.