For many startups and founders, achieving unicorn status validates remarkable growth, market dominance and future potential
A key factor in the success of Indian startups is their profound grasp of localisation and the nuances of the Indian market
Supportive government policies further bolster this ecosystem, fostering innovation and providing a conducive environment for startups to thrive
In 2011, InMobi did something unprecedented in Indian business history by achieving unicorn status, reaching a valuation of over a billion dollars. This inspiring story of a homegrown startup highlighted the growth potential within India’s startup ecosystem.
Since then, many other Indian startups, such as Flipkart, MuSigma, Ola and Paytm, have followed suit. As of July 2024, India proudly hosts 115 unicorns (according to Inc42 data), indicating a thriving entrepreneurial ecosystem. They possess a unique blend of innovation, market insight and strategic growth plans.
Many factors drive the evolution of unicorns, some of them are as follows:
Balancing Growth And Profitability
For many startups and founders, achieving unicorn status validates remarkable growth, market dominance and future potential. It attracts top talent, fosters lucrative partnerships and elevates brand reputation among investors and customers. However, while achieving unicorn status is significant, it shouldn’t be the sole measure of success.
Although ‘unicorn’ status indicates high growth potential, it doesn’t guarantee long-term profitability. Some ‘zombie unicorns’, have earned billion-dollar valuations but struggled with profitability, relying on continual investor funding and raising concerns about overvaluation. Therefore, a strong foundation of profitability and a sustainable business model is crucial for long-term success. For example, Zerodha and Zoho have become profitable unicorns without external funding.
Moreover, it’s essential to recognise that enduring success and impact in business transcend valuation metrics. Many startups thrive without achieving unicorn status, emphasising impactful problem-solving, job creation and sustainable revenue growth. For instance, Hyderabad-based Zaggle, a B2B fintech startup, has been profitable since 2020 and exhibited substantial share price growth post-IPO.
Prioritising Innovation And Adaptability
Successful startups that have captured significant market attention are driven by innovation, often disrupting traditional industries or creating entirely new markets with groundbreaking solutions. For example, Razorpay introduced products like an integrated multiple payment platform and easier management for failed payments, addressing pain points in the payment ecosystem. Similarly, Paytm Soundbox offered a portable device for instant voice notifications, ensuring reliable and accessible payment updates.
The innovative spirit of Indian startups is often complemented by their adaptability. During the COVID-19 pandemic, many startups embraced pivot strategies to navigate unprecedented challenges. For instance, Swiggy expanded into grocery delivery through Instamart after restaurant order volumes plummeted and Urban Company introduced new safety protocols and disinfection services under the project titled ‘Kavach’.
These examples highlight how Indian startups swiftly turned adversity into opportunity by diversifying product offerings, expanding into new markets and accelerating digital transformation initiatives.
Focussing On Deep Market Understanding And Localisation
A key factor in the success of Indian startups is their profound grasp of localisation and the nuances of the Indian market. Unlike multinational corporations that often adopt a uniform approach, many Indian unicorns customise their offerings to cater to the distinct requirements of local consumers.
For instance, Licious, a direct-to-consumer (D2C) startup specialising in fresh meat and seafood delivery, tackled hygiene and quality issues prevalent in India’s conventional meat industry by establishing a robust farm-to-fork model, ensuring fresh meat tailored to regional preferences.
Similarly, acknowledging the value-conscious nature of Indian consumers, several unicorns have offered innovative solutions that prioritise affordability and accessibility. For instance, boAt, a popular audio-wear brand, offers stylish and feature-rich earphones and headphones at significantly lower prices, challenging the market dominance of premium headphone brands.
Indian startups also focus on language and cultural nuances, resonating more effectively with domestic consumers. For instance, ShareChat, India’s largest vernacular social network, caters to a massive non-English speaking audience, allowing them to engage in content creation and consumption in their native languages.
Accessing Programming Talent
Indian tech talent’s strong coding skills, problem-solving abilities and adaptability to new technologies have significantly contributed to the success and global competitiveness of Indian unicorns across various sectors, such as e-commerce, fintech, ed-tech and healthcare.
The country has a unique advantage, being home to over 5.8 Mn programmers and boasting half a million individuals specialising in artificial intelligence (AI) and data sciences, making it a critical hub for technical talent.
With exceptional talent graduating annually from esteemed engineering colleges such as IITs, IIITs and NITs, there is a continuous pipeline of skilled workforce available to Indian startups. These graduates bring technical expertise, innovative thinking and problem-solving skills, benefiting startups immensely. Edtech startups like Masai School are pivotal in preparing coding talent.
The rise of remote work culture also allows startups to tap into a wider, more diverse talent pool available in tier-2 and tier-3 towns, enriching the startup ecosystem with fresh perspectives and varied experiences.
Harnessing India’s Large Population And Unsolved Problems
India’s large population and numerous unorganised sectors provide fertile ground for startups to identify and address challenges, creating ample opportunities for innovation and growth. Several Indian unicorns have successfully capitalised on these opportunities by tackling significant problem statements.
For instance, Moglix assists small and medium-sized businesses and manufacturing plants in procuring industrial goods. Policybazaar has addressed insurance transparency, simplifying the insurance buying process for consumers.
BookMyShow has revolutionised the entertainment ticketing industry by improving ticket accessibility and convenience. OYO has organised the fragmented budget hotel market, while BigBasket has streamlined the grocery sector.
India stands uniquely positioned in the global startup landscape, supported by a diverse array of stakeholders, initiatives and government policies. Educational institutions play a crucial role in nurturing talent, complemented by ecosystem enablers like incubators that provide essential mentorship, access to experienced entrepreneurs and facilitate connections to seed funding, venture capitalists and industry leaders.
Supportive government policies further bolster this ecosystem, fostering innovation and providing a conducive environment for startups to thrive. This evolving ecosystem, inspired by successful startup role models, has the potential to spawn numerous startups, drive job creation and solve India’s unique problems.
While some businesses may achieve unicorn status, many more are poised to become sustainable enterprises, making significant contributions to India’s economy.
