Recently, the number of unicorns in India reached the 100-mark. One unicorn means a startup of at least Rs 7,500 crore turnover. The total valuation of these unicorns is USD 330 billion, that is over Rs 25 lakh crore. The average annual growth rate of Indian unicorns is more than that of the U.S., the U.K. and many other countries.
- A unicorn is any privately owned firm with a market capitalization of more than USD 1 billion.
- It denotes new entities dedicated to offering creative solutions and new business models, among other things.
- There are several categories like fintech, Edtechs, B2B (Business-to-Business) companies, etc.
India has become the 3rd largest start-up ecosystem in the world after the US and China. 44 Indian start-ups have achieved unicorn status in 2021 taking the overall tally of unicorns to 83, most of which are in the services sector. India has seen such rapid growth in unicorns due to several strategic as well as conditional reasons.
Government of India is understanding the value of working with disruptive innovators across the value chain and using their innovations to improve public service delivery. The pandemic accelerated the adoption of digital services by consumers helping start-ups and new-age ventures build tech-focused businesses for customers. Many Indians moved to online services exploring a host of services ranging from food delivery and Edu-tech to e-grocery. he growth of Digital Payments is another aspect that aided the unicorn the most.
Challenges:
Increasing Investments Do Not Ensure Success of a Startup: Amid the Covid-19 crisis, when the central banks have released a global glut of liquidity, money is no more a difficult task to raise.
The billions of dollars being invested in startups represent the large bets on distant outcomes, and not value generation by way of revenues. Plus, one cannot assume the high rate of survival of these startups with such investments, as it can be assured by profits.
India, still a Marginal Player in the Space Sector: While India’s startups in the fintech and e-commerce sector are doing exceptionally well, the space startup sector remains an outlier.
This is despite the fact that India is a leading space-faring country with end-to-end capabilities to make satellites, develop augmented launch vehicles and deploy interplanetary missions.
The reason for the lack of independent private participation in space includes the absence of a framework to provide transparency and clarity in laws.
Indian Investors Unwilling to Take Risks: The big investors in India’s startup sector are from overseas, Japan’s SoftBank, China’s Alibaba, and Sequoia from the US.
That’s because India does not have a serious venture capital industry with an appetite for risk. The country’s established conglomerates have mostly stuck to traditional businesses.
Eduindex News 
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