Not tantalising tiger tales, but enduring elephant entrepreneurs. That is the recalibration India’s unicorn story is undergoing, with venture capitalists (VC), other funding entities, industry experts and analysts vouching in one voice, ‘you ain’t seen nothing yet!’
Going by experts, unicorns, a term describing startups earning valuation of one billion dollars or more, are likely to emerge beyond edtech and fintech in India in the coming days, from areas as diverse as agriculture and artificial intelligence.
“AgriTech, with its potential to revolutionize India’s vast agricultural landscape through technology-driven solutions, is one such area. As innovation targets inefficiencies in farming, supply chains, and sustainability, AgriTech is set to play a transformative role in the Indian economy,” said Ninad Karpe, founder & partner, 100X. VC, an early stage venture capital firm.
Other areas Karpe see the gold rush coming in would be the logistics and supply chain sector, as India becomes a global hub for manufacturing and e-commerce, as well as deep tech. “As AI, blockchain, quantum computing, and advanced engineering gain traction, startups working on cutting-edge, complex technologies will have the opportunity to scale and redefine industries.”
Rajendra K. Sinha, professor & chairperson, Centre of Excellence in Banking, Jagdish Sheth School of Management, Bengaluru, concurs. “I am aligned with the opinion in the CII report of 2024 that Unicorns in India starting from 2024 and in next one decade will have focus on creating disruptive innovation in deep-tech.”
On the face of it, India’s unicorn story had swung into a low gear in these couple of years after a post-Covid boom. Some would even say it’s on a reverse gear, with companies like Snapdeal, even dropping out of the elite club despite being initially valued at over one billion.
Many, like Vipul Nath Jindal, CEO and MD of Next Bharat Ventures, a Suzuki-associated venture to accelerate startups, believe it did have its pluses. “The decline in startups…(was due to) tightening of monetary policies and rising interest rates that led to cautious investment strategies, resulting in what many call a ‘funding winter’,” adding, “we believe this is an opportunity to rethink how we measure success in the startup ecosystem.
His solution? Investors need to be patient and focus on entrepreneurs who create lasting social impact rather than solely prioritising profitability.
“We aim to cultivate what we call "Elephant Entrepreneurs"—resilient founders who prioritize strength, collaboration, and community-driven growth, ensuring their ventures have the time and resources to grow organically and make a meaningful difference in society,” said Jindal.
But over this weekend, as MoneyView, an app which offer online loans based on credit assessment as well as expense management tools, became the latest entrant into India’s unicorn club, it’s like the mojo is back. MoneyView is the 6th Indian unicorn this year alone, which ain’t a patch compared to the boom time of 2021 and 2022, but not bad considering that in the same January-September period of 2023, India could spawn only one unicorn — Zepto.
India’s total unicorn count now stands at 117 according to Tracxn, which makes the nation the world’s third biggest hub of billion dollar startups behind the US (nearly 1,000) and China (double of India at 243). And more importantly, by all estimates, there’s a lot more where it came from, with one estimate predicting that India will cross 150 pretty soon.
Of course, a lot will depend on policy decisions. A US Fed rate cut this week will help as it will make the cost of lending cheaper (the post-Covid cutting of interest rates one of the reasons for the easy money that came in search of Indian startups in 2021 and 2022), as also flexible regulations and tax structuring. Many of India’s biggest unicorn success stories, like Flipkart for example, are based abroad, and are in the process of ‘flipping back’ to India domicile — “government reforms aimed at a conducive domestic business environment, flipping reversal may gain momentum,” according to Sinha.
AI could make or break India’s success story, though. Since AI and other deep tech areas require massive funding, not only are the chances of unicorns in this area faster, they could also mop up most of the funds available in the market — the question being, can Indian startups rise to the top of the heap in this area?
“Large capital investments are being needed by Generative AI startups (most of which are nearshored in the US), and VCs will need to balance their investments in nearshore GenAI vs Unicorns in India, which are most old gen convenience-led business models. (So) if GenAI-based Indian startups appear, they look more likely to attract incremental investments,” said Srinivasa Reddy, assistant professor, Marketing Management area, T.A. Pai Management Institute, Manipal.
Karpe believes the best is yet to come. “Incubators, accelerators, and entrepreneurship cells across the country are nurturing innovation at an unprecedented scale, and we’re seeing this energy not just in Tier 1 cities but in Tier 2 and Tier 3 towns as well. The startup culture has deeply permeated these regions, signalling a shift in mindset and opportunities.”
“It’s a recalibration...a phase of reflection, where investors are recalibrating their expectations to ensure long-term success rather than short-term hype. The process will lead to a more resilient, innovative, and competitive ecosystem,” he summed it up.