Five start-ups joined the unicorn club in two weeks, taking the total count to 33 this year, the highest in at least a decade. An analysis of data sourced from market research firms Venture Intelligence and Tracxn also showed India added under 20 unicorns last year. In fact, just close to 40 start-ups entered the league of unicorns during 2011-2020.

A bunch of start-ups, including Spinny, Mamaearth and Ecom Express, are in the queue to soon turn unicorns, data showed.

The pandemic accelerated consumer adoption of digital services, helping start-ups and new-age ventures that typically build tech-focused businesses, delivering an array of offerings to customers. Many Indians who had traditionally been subscribers of brick-and-mortar businesses moved online and explored a host of services ranging from food delivery and ed-tech to e-grocery, adding to start-ups’ user base and expediting their business expansion plans. Not surprisingly, investors sitting on adequate capital rushed to back start-ups. Interestingly enough, many start-ups of late have attained $1-billion valuation with much smaller fundraises, a trend that was not very rampant in the past. For instance, meat and seafood brand Licious that turned unicorn early last week hit a valuation of $1 billion on a $52-million fresh funding round led by IIFL AMC’s Late Stage Tech Fund.

This explains the increasing relevance of digital-first brands. “Capital is obviously chasing opportunity. Investors are putting money behind companies who they believe have the right capabilities, tech stack, customer service orientation and team strength,” says Madhur Singhal, managing partner and CEO at global management consulting firm Praxis Global Alliance.

Total funding for Indian start-ups has already hit the $20-billion mark so far this year, and is nearing $30 billion, surpassing last year’s overall fund count. Start-ups raised some $10.8 billion in funding in 2020, according to data from Tracxn.

The funding boom is here to stay, believes Singhal. There will be no dearth of early-stage capital although growth-stage equity might see some dip considering that businesses are already well capitalised. Singhal, however, thinks that “funds need to be deployed prudently so that they not only grow their businesses, but also create a scale play that is sustainable.”

unicorn funding

India added 33 unicorns in 2021 — highest ever