Start-up Gaining Unicorn Status Aid in Escalating India's Economy



Start-up Gaining Unicorn Status Aid in Escalating India's Economy

Unicorn status has become a trending topic in the startup ecosystem in recent times. Generally, a startup announces venturing into unicorn club with pride after its value is estimated more than $1 billion. With the increasing valuation of the companies the name and status changes as well thus the companies valued over $5 billion are pentacorn, more than $10 billion valued companies are decacorn, and over $100 billion are tagged as hectacorn.

The unicorn trend emerged in 2013 at that time, India had only seven private companies that were valued at $1 billion. But, fast forward to 2020, the country houses 21 unicorn that is collectively estimated to be $73.2 billion. Furthermore, the country is hoping to possess about 100 unicorns by 2025 despite being affected by COVID and the country’s economy is gradually recovering. 

Unicorns Riding Country’s Economy Towards $5Tn 

We are quite aware of the fact that startups are the backbone of India’s economy which certainly aids the country to inch towards its goal of entering $5 trillion economies. These startups attract investment toward the country, create promising job opportunities, helps in increasing the country’s GDP indeed elevates the overall standard of living through its innovation and technological advancement even in the rural area.

Observing the rapid growth of the startup ecosystem and an increasing number of unicorns and escalating venture capital funding, Rajan Anandan, Managing Director, Sequoia Capital India, while addressing at the India Global Week 2020 stated, "This has really led to an extremely vibrant early-stage venture ecosystem, if you just hop forward five years, we are going to go from 30 unicorns to 100 unicorns, we are very confident that by 2030, you are going to see another 10X growth from here in a number of startups, number of billion-dollar companies that are getting built, as well as venture capital funding. So we are extremely excited about the ecosystem in India.”

These startups are risk-takers as well as wealth creators that serve as a driving force in creating a better future, by providing various opportunities to be its technological development to manpower utilization. Generally, the startups create a lot of job opportunities and also attract a lot of investors which is not just elevating their business but, also has a role in elevating the country’s economy. It is been noted that the IT services and financial services account for about 70.6 percent and 72 percent of value addition to India’s economy respectively. These substantial service contributions aid in driving GDP.

Presently, India is ambitious to reach its goal of touching $5 trillion by 2025. From its nominal GDP of 190 lakh crore in 2018-19 which is $2.7 trillion to reach $5 trillion in 2025, India must grow at a 10.8 percent CAGR. Currently, one dollar equates to 70 the country should grow even at 12 percent CAGR is the rupees depreciates to 75. To reach this state the country has to tremendously work in strengthening its economy. But the startup has a strong role-play in the escalating Indian economy.

Hurun Global Unicorn List unveils that as of now, India stands fourth in the higher number of unicorn possession right after the United States (233), China (227), UK (24), and India (21). Having 21 unicorns India’s estimated value is $73.2 billion out of which eleven unicorns are backed by three prominent Chinese investors. However, India’s top five unicorns include Paytm valued at $16 billion, Oyo Rooms - $8 billion, Byju’s- $8 billion, Ola Cabs - $6.0 billion, Swiggy -$3.5 billion, Zomato- $3.5 billion. With this development of the unicorns, India could certainly reach its goal of entering a $5trillion economy at the earliest.