India to have over 250 unicorns by 2025

India will have more than 250 Unicorns by 2025. The country has now been positioned as the 3rd largest unicorn hub in the world and surpassing even major countries such as the UK, Germany, France, and more. Moreover, it becomes the fastest growing startup ecosystem and creating a unicorn every five days. As per the report published in the Economic Times on January 15, 2022, India – with 90 unicorns – is the third-largest unicorn hub behind the US (487) and China (301) and ahead of the UK (39). Indian unicorns are also exploring the public listing avenues as a next step to realize the growth potential.

This prediction comes from the proprietary data analysis of venture growth investor, Iron Pillar, in its Tech Unicorns Market Landscape Report IV. InMobi was India’s first unicorn in 2011. Entrepreneurs are building bigger enterprises at a faster rate -- 50 per cent of the 130 companies reached unicorn status in the first five years after their initial institutional fundraising. The public listing of 12 Unicorns is another indicator of the increasing maturity of the Indian tech ecosystem. While there is a strong belief that this pace may reduce a bit in the next 24 months, creating 250 companies with over $1 billion in value by 2025 is an extremely activable goal for Indian founders.

India is on a global growth story. Thus, lots of global funds and investors are chasing assets. The internet companies in India do not even control 1% of the $3.4 trillion domestic equity market. In the US, the internet ecosystem dominates with 40% of the market capitalisation. The surge in fund inflows into startups to the digital transformation has disrupted everything in the wake of the coronavirus pandemic.

The pandemic-induced lockdowns have driven this rally, and that along with the huge market potential for these companies has caught the attention of global investors. Investors are looking for some sparks in new companies as they sit on a massive amount of capital. Unicorns built in India included 58 global cloud companies, 59 B2C (business to consumer) companies, and 13 B2B (business to business) companies. An increasing number of Indian tech founders building for global markets from India are choosing to base their headquarters in the US. Companies building cloud products for the world from India are extremely capital efficient, reaching the unicorn status with 42% less capital compared to B2C companies. They also outperform on value created per unit of capital raised and the number of exits.

The average number of fundraising rounds by global cloud unicorns is fewer than B2C and B2B unicorns. According to CB Insights March 2022 report on the share of unicorns, India emerged as the third-largest tech market in the world after the US and China. Indian tech startups notched $42 billion funding in 2021 alone. 

Dr. Deepak Kumar Sahu, President & CEO, VARINDIA