The average number of years required for an India startup to become a unicorn declined from 8.4 years in 2022 to 5.5 years in 2023, according to a report by Orios Venture Partners. The report also revealed that India ranks third on the list of countries with the most unicorns, but only two companies achieved a valuation of $1 billion or more last year. The new economy of startups contributed 15 public listings thus far.
Orios Venture Partners founder Rehan Yar Khan highlighted the significance of companies achieving unicorn status, especially in a challenging liquidity environment where valuations are decreasing. He used Zepto as an example, a company that became a unicorn in 2023, stating that in order to reach that milestone, a company needs to demonstrate a certain level of sales. This indicates the immense size of the market and its ability to provide billion-dollar valuations based on more than just finance and liquidity.
India experienced a brief pause in producing new unicorns, but in August 2023, Mumbai-based quick commerce startup Zepto broke the dry spell. Zepto, founded by Aadit Palicha and Kaivalya Vohra, secured $200 million in funding led by StepStoneGroup, with a valuation of $1.4 billion. In December 2023, fintech firm InCred also achieved unicorn status through a Series D funding round, raising $60 million.
The report emphasized the importance of tracking a company’s journey from its foundation to becoming a unicorn and eventually making exits. Orios Venture Partners made a total of seven investments in 2023, compared to their usual rate of 10-12 investments per year.
The report, titled Indian Tech Unicorn and Exits Report 2023, documented a total of 123 exits by startups during the year, including successful IPOs by Mamaearth and Ideaforge. However, this number is lower than the 229 exits recorded in 2022. Orios Venture Partners’ Rehan Yar Khan clarified that the report primarily focuses on exits related to liquidity beyond funding and secondaries, such as public listings.
The report also highlighted notable acquisitions in 2023, including OLX Auto’s sale to CarTrade for $67 million, Texts’ sale to Automattic for $50 million, Plix’s sale to Marico for $45 million, Edamama’s sale to Reliance Retail for $44 million, and TrillionLoans’ sale to BharatPe for $36 million.
When discussing the current market conditions for startup exits, Khan mentioned that globally, a large percentage of acquisitions fail. Founder-driven approaches vary from one company to another, making each acquisition unique.
The news about the declining average time for startups to become unicorns in India and the emergence of new unicorns like Zepto and InCred has sparked interest in the country’s startup ecosystem. This trend indicates the growth potential and increasing pace of the Indian market, making it an attractive space for investors and entrepreneurs alike.
Overall, the Indian startup landscape is evolving rapidly, with faster timelines for achieving unicorn status and several successful exits. The report by Orios Venture Partners sheds light on the dynamic nature of the market and provides valuable insights for investors and industry observers.
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