Will these Indian soonicorns end the dry spell of no unicorns in 2023?

The first quarter of the calendar year 2023 saw no new unicorns compared to the year-ago quarter in which 14 start-ups crossed the $1 billion valuation benchmark. Data shared by Tracxn Technologies with Business Today revealed that while there has been a dry spell of sorts, the first quarter, however, saw more than 26 start-ups joining the soonicorn club which refers to start-up companies which are about to reach the $1 billion valuation-mark. 
 
The soonicorn club includes start-ups such as Absolute, Log9 Materials, Simple Energy, Digio, Charge Zone, Ecozen Solutions, among others. Per Tracxn, they are currently valued at $500 million, $213 million, $166 million, $129 million, $50 million and $48 million respectively.
 
The list also included other companies across different sectors such as The Ayurveda Co., ElectricPe, Bounce, Beaconstac, among other names. 
 
The start-up ecosystem has been witnessing a funding decline for some time now. In the first quarter of 2023, Indian startups raised $2.8 billion which is a 75 per cent decline from the Q1 of 2022. 
 
While start-ups such as PhonePe, Lenskart, Mintify, Insurance Dekho, FreshtoHome foods, TI Clean Mobility and KreditBee managed to raise more than $100 million each during this quarter, late stage funding dipped to an all-time high of 79 per cent, the Tracxn report stated. 
 
Commenting on the highs and lows, this ecosystem has been witnessing, Neha Singh, co-founder of Tracxn Technologies told BT, “India's startup ecosystem has immense potential to grow in the future. It ranked third in terms of funding in 2022, and it moved up to second in Q1 2023. Investors will view startups with strong fundamentals, robust unit economics, and a clear path to profitability as good investment opportunities. Recent fundraising activity in late-stage companies like Lenskart and PhonePe support this idea, and such companies will keep seeing strong investor interest.”
 
PhonePe joined the decacorn club (start-ups valued at $10 billion or more) after raising $650 million in multiple Series D rounds of funding. The fintech company is today valued at $12 billion.

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