Record nine startups get unicorn status amid shift in investor sentiment

Record nine startups get unicorn status amid shift in investor sentiment

Record nine startups get unicorn status amid shift in investor sentiment

MUMBAI : India’s startup ecosystem created a record nine unicorns in 2019, despite sentiments turning cautious in the December quarter, according to a report from startup data tracker Tracxn.

Unicorns refer to privately-held companies with a valuation of a billion dollars or more. The billion-dollar club The billion-dollar club (Graphic by Sarvesh Kumar Sharma/Mint) Last year, eight unicorns had emerged in India, while in 2017 and 2016 there were 1 and 3, respectively, the report said. Startups in the country are achieving scale far more briskly with investors putting in large sums with a long-term view.

The unicorns of 2019 include online grocer BigBasket, fantasy gaming platform Dream11, e-commerce logistics firm Delhivery, eyewear retailer Lenskart, trucking logistics firm Rivigo, cloud-based contract management firm Icertis, data management firm Druva, Ola Electric, the electric vehicle arm spun off from the ride-hailing platform, and Zoho, a bootstrapped business and productivity software firm. Most of these unicorns were created in the first half of the financial year, or until September, when investors continued to be bullish on high-growth loss-making startups.

Mint reported on 28 December that deals of more than $100 million are expected to slow down, with investors turning cautious on companies with high burn rate, following the meltdown of co-working space provider WeWork. The largest fundraising round in 2019 include hotel aggregator Oyo securing $1.5 billion from founder Ritesh Agarwal’s Cayman Islands entity RA Holdings and SoftBank, among others, and payments firm Paytm raising a $1-billion round led by T Rowe Price, SoftBank and Alibaba, according to the Tracxn report. The report also threw light on region-specific trends.

For instance, Mumbai and Bengaluru lost market share in the last three years, compared to 2014-16. The number of startups founded in Bengaluru and Mumbai, in terms of market share, fell from 23% and 16% between 2014 and 2016, to 21% and 13%, respectively, in 2017-19. On the other hand, Delhi (31% to 33%), Ahmedabad (3% to 4%) and Indore (1% to 2%) improved their performance during the period, indicating the proliferation of startups beyond metros.

The year also saw a number of investors backing Indian tech startups, including private equity funds General Atlantic and TPG, Dutch development bank FMO, and CDC, the UK government’s development finance institution. These investors backed at least 20 companies this year.

Corporates and banks also continued to make strategic bets, deploying funds across growth to late stages. These include Facebook, which invested in social commerce firm Meesho, and Tencent, which backed B2B marketplace Udaan, online insurance aggregator Policybazaar and streaming platform MX Player. Others include Kotak Mahindra Bank, Goldman Sachs and Bajaj Auto.

Source: livemint


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