From ‘Soonicorns’ to unicorns: India’s startup boom

The five trillion dollar economy may have to wait, but billion-dollar companies keep mushrooming, COVID-19 or not. This weekend, reports emerged of Japan’s SoftBank being in final negotiations to invest $250 million in the Indian social commerce platform Meesho.

Once completed, this would propel the Bengaluru start-up into the coveted unicorn club, the name given to tech and innovation-oriented start-ups valued at billion dollars or more (approximately above Rs 7,200 crore).

Just over a month into the new year, and Meesho isn’t even the first unicorn of 2021. Last month, Digit, a start-up which works in the area of insurance technology, was adjudged a unicorn, after its valuation streaked up to $1.9 billion.

Meesho may be the second, but unlikely to be the last this year. A recent Nasscom report forecasts that India will have more than 50 unicorns before 2021 is through (the total presently is 37), and more than 100 by 2025.

It seems very much possible. Right through the ravages of the pandemic, funding and investment kept flowing in, leading to the creation of as many as 11 new unicorns in 2020. In fact, the year closed with the curious dhamaka of a unicorn spawning another unicorn. In December, short video platform Glance achieved unicorn valuation—Glance is a subsidiary of InMobi, the first unicorn from the country back in 2011.

It’s not the first of its kind, though, with Paytm’s spin-off Paytm Mall also achieving unicorn status like its parent company a couple of years ago. And Paytn itself is not just a unicorn, but is now a ‘deca corn’, or a company with valuation of more than $10 billion. Two other Indian companies have achieved this exalted status —Edutech giant Byju’s and the hospitality chain Oyo.

India’s unicorn success has been spread across sectors like e-commerce to education technology to food delivery aggregation and even transport logistics. Meesho, for example, is a social commerce platform, where resellers can spread the word around of products available on the site through their social media networks like Facebook, WhatsApp or the like. Any sale that materialises through their effort translates into a commission.

Meesho did not respond to THE WEEK’s queries.

COVID and other hindrances apart, this unicorn boom is a good sign for budding entrepreneurs across India to dream big. Some pre-COVID reports indicated that India may have as much as 24,000 startups at various stages, each hoping to click. And the number of startups with huge funding that are nearing a possible unicorn status, or “soonicorns” as they are called, could be above 200.

“The unicorn wave in India has inspired us as entrepreneurs to aim not to be the best in India, but to be world class,” Sharan Grandigae, who heads a design startup in Bengaluru, says.