Despite funding winter, Hurun finds 122 Indian future unicorns from 25 cities; details here

Despite a persistent "funding winter," India's rapidly expanding start-up ecosystem continues to support several small businesses. Over the course of the next four years, India is expected to have 200 unicorn start-ups—start-ups valued at more than $1 billion— an increase of 122 from the current number, according to a Hurun report released on Wednesday.

According to reports, a 'funding winter' is upon the otherwise fledgling Indian start-up ecosystem due to various reasons like liquidity conditions getting tighter all across the world.

The ASK Private Wealth Hurun India Future Unicorn Index 2022, released by the Hurun Research Institute in association with Ask Private Wealth, highlighted that as many as 122 start-ups from around 25 Indian cities that are on the path toward becoming unicorns in the near future.

The value of India's potential unicorns is presently estimated to stand at around $49 billion, up 36 per cent over the previous year, according to the report's findings. Considering their operations in the market, several of these firms are predicted to become unicorns over the next two to four years, it added.

Top 'Gazelles' in India

Some of the upcoming start-ups that are expected to reach valuations of $1 billion or higher within the next 2 years, or 'Gazelles' in financial lingo, include a wide range of companies that are based on several IT service foundations. Logistics solutions provider Shiprocket, Grocery delivery platform Zepto, E-commerce platform Turtlemint, EV start-up Ather Energy and AgriTech start-up Ninjacart, are among some of the prominent ‘Gazelles’ that are expected to become unicorns within the next 2 years. 

The anticipated market value of the gazelles ranges from $500 million to $1 billion, the report added.

Top 'Cheetahs' in India

In addition to Gazelles, a number of start-ups are poised to become unicorns in the following four years, termed as 'Cheetahs'. These businesses are recognised as cheetahs in the financial world. Firms like Pepperfry, Juspay, Pixis, ZestMoney, and Cuemath continue to rule the rankings in yet another show of the sheer dominance of technology-based enterprises, with only a few notable outliers, like SUGAR Cosmetics, which offers consumer goods. While Bengaluru-based Cheetah Juspay had gained attention when SoftBank led a $60 million financing round, Ratan Tata-backed FinTech Mswipe is anticipated to soon advance into unicorn status if its plans to become a digital SME bank are fulfilled timely. 

Cheetahs are expected to be worth between $200 million and $500 million in the ASK Private Wealth Hurun India Future Unicorn Index 2022. There are 71 Cheetahs in India, and they have together raised $7.7 billion in capital. ASK Private Wealth Hurun India Future Unicorn Index 2022 Cheetahs' total market value climbed by 13% year over year to US$17.9 billion.

Top investors in India

Additionally, a large number of willing investors who are prepared to bet on any ambitious idea out there, unquestionably provide a strong financial foundation for the nurturing of the Indian start-up ecosystem. While top venture capital firms like Sequoia Capital, which currently tops the list of the top investors with about 39 investments, believes in partnering early when the start-up's DNA is just beginning to take shape, firms like Tiger Global also like to bet high on Indian start-ups, having recorded as many as 27 investments in the most recent year. 

Alongside venture capital firms, Indian angel investors have committed to assisting Indian businesses in their endeavours. Many have stepped up to provide capital to start-up businesses that are in need of it. There are currently thousands of angel investors in India, up from only a handful of individual investors about ten years ago. The ecosystem has developed and grown vibrant, and the successful listing of start-ups has been quite beneficial.

With 10 future unicorn investments, CRED founder Kunal Shah and Snapdeal co-founder Rohit Bansal are ranked first on the Hurun list. Kunal Bahl, who is the co-founder and CEO of Snapdeal follows them with nine further prospective Unicorn investments. Additionally, Anand Chandrasekaran and Binny Bansal each have invested in four potential unicorns. 

Top 10 start-up sectors in India

Furthermore, the report's findings indicate that with 26 start-ups included in the index, FinTech was the most notable start-up sector, followed by E-commerce with 14 and SaaS with 10. The index includes around half of FinTech, E-commerce, SaaS, and EdTech businesses. The other potential industries in the Indian start-up ecosystem are AgriTech, AI, HealthTech, and shared economy. With a combined valuation of $11.5 billion or 24% of the value of all potential unicorns, FinTech start-ups continue to rule the Indian start-up scene, followed by E-commerce, SaaS, EdTech and AI among others.

Top 5 Indian cities for start-ups in India

Lastly, in a continuing trend, the index also observed that the city of Bengaluru continues to maintain its title as the ‘start-up capital of India’ harbouring over 46 future unicorns, followed by Delhi with 25 and Mumbai with nearly 16. Home to about 16 gazelles and 30 cheetahs, with a present market value of $18.4 billion, it wouldn't be wrong to assume that Karnataka's capital would remain known as India's capital of unicorns in the years to come, according to the findings of the report.

 

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