India—the third-largest startup ecosystem in the world with 60,000 firms—added 46 unicorns in 2021, doubling the number of billion-dollar companies to 90, as per a new report titled “India Tech Unicorn Report” by Mumbai-based venture capital Orios Ventures.
Indian startups raised a total of USD 42 billion in 2021, up from USD 11.5 billion in 2020, the report added.
“Indian unicorns are flourishing in this fast-paced and dynamic economy. These startups are not only developing innovative solutions and technologies but are generating large-scale employment,” it said. “Today, one out of 13 unicorns globally was born in India.”
In comparison, the US added 254 unicorns in 2021, taking the count up to 487, while China saw 74 startups turning into billion-dollar companies, which shot up the total number of unicorns in the country to 301.
India added the most unicorns in the fintech sector, followed by e-commerce, SaaS, and health-tech. Of the 46 newly-minted unicorns in 2021, 11 were fintech firms. Overall, the number of fintech unicorns in the country reached 18. E-commerce, SaaS, and healthtech saw six, five, and four startups entering the billion-dollar club, respectively. Meanwhile, new emerging sectors like D2C and crypto added three and two unicorns, respectively.
“Despite witnessing an economic downturn in the first half, it has been an exciting and tremendously promising year for tech startups,” said Rehan Yar Khan, managing partner at Orios Venture Partners.
The average number of years to become a unicorn came down to 7.8 years in 2021 compared to 9.9 years in 2020, which witnessed 12 startups becoming unicorns. There were 33 startups that became unicorns in less than five years in 2021.
D2C roll-up startup Mensa, which was set up in May 2021 and took only six months to become a unicorn, emerged as the fastest Indian startup to enter the elite club. Based on the business model pioneered by US startup Thrasio, which acquires online brands and grows them, Mensa also buys brands, takes them globally, and drives their D2C sales.
Meanwhile, at USD 37.6 billion, Flipkart is India’s most valuable unicorn. Founded in October 2007, Flipkart began its journey as an online bookstore and later expanded to more products, becoming a full-fledged e-commerce marketplace. It was acquired by American retailer Walmart in 2018. The company currently offers 80 million-plus products spread across more than 80 categories.
Of the 11 Indian startups that went public in 2021 and raised over USD 7 billion, eight were unicorns. They include fintech major Paytm, food delivery giant Zomato, omnichannel beauty retailer Nykaa, and SaaS firm Freshworks.
The Indian government is also taking note of local startups achieving billion-dollar-plus valuations. Last week, India’s commerce and industry minister Piyush Goyal said the country should target to add 75 unicorns this year. He also asked startups to make suggestions on making startup regulations simpler in the country.
“Let us make India among the top 100 destinations in the world. A destination for innovation and invention. Let us target to nurture an additional 75 unicorns by the end of this year,” Goyal said at the virtual inauguration session of the Start-up India Innovation Week.