India will have 250 unicorn startups by 2025, with 15 already added in the year 2022 so far, a proprietary data analysis report by Iron Pillar, a venture growth investor shows. Since the country's first product tech company, Inmobi, reached the unicorn status in 2011, 129 unicorns have been created, generating a total value of $535 billion, says the report.
A total of 100 entered the coveted unicorn status in the past three years alone, with 12 listing on the share market, the Iron Pillar report titled 'India Tech Trends: Volume IV – Tech Unicorns Market Landscape' said.
Of the 130 unicorns, a maximum of 58 are global cloud companies built from India, 59 are B2C, and 13 B2B companies. The rate at which companies are reaching the unicorn status has also increased, with over 50% taking just 5 years after their first funding and over 80 reaching the status in 7.5 years.
Startups focussing on cloud-based products and services from India have increased manifold. They have proved to be capital efficient, reaching the unicorn status with 42% less capital as compared to B2C companies. They have created 3x more value than B2C startups and 1.2x higher exits than B2C companies.
Despite an unprecedented rise of Indian unicorns in the past couple of years, the country's global share at 6%, in producing unicorns, is still far behind the U.S. and China at 51% and 17%, respectively. However, it's better than developed countries like the UK, Germany and France.
The tech industry in India is booming, with $42 billion raised by startups in 2021 alone. There are over 10,000 funded startups, and the total value of 58 cloud unicorns built in India at $198 billion.
The pace at which unicorns are being created is also increasing. India created 53 unicorns in 2021, an over two-fold rise from 19 in 2020 and 13 in 2019. Some of the consumer tech unicorns (13) like BJYU's, Zomato, Ola, Paytm, OYO, etc, are expanding well beyond India.
Moreover, unicorn exits and mergers & acquisitions are also increasing in size and frequency. The last high-profile listing by an Indian startup on the US-based NASDAQ stock exchange was Zscaler at a $32.7 billion valuation. Flipkart, one of the early unicorns in India, was bought by the US-based retail behemoth Walmart Inc for $16 billion.
An increasing number of Indian tech founders building for global markets from India are choosing to base themselves in the US, the report shows. Region-wise, 31% of the startup unicorns in India have their headquarters in the US, followed by 28% in Bengaluru, 21% in Delhi-NCR and 12% in Mumbai. The number of unicorns choosing their base in the US increased from 36 in 2021 to 40 in 2022.
However, Anand Prasanna, Managing Partner, Iron Pillar told Fortune India it's not a sign of worry but a proud moment for India. "As you would probably know, Indian origin founders are already the largest set of non-US born Unicorn founders in US (please refer to data below published by Stanford University in January). The fact that Indian founders are building global tech companies from the US, using Indian technology prowess, and winning against other global companies, should be a matter of pride for all Indians. Not a matter of worry. Please note that these companies are building for global markets (not Indian market)," said Prasanna.