Amid the shift in the funding dynamics away from the growth-at-any-cost model for startups, 2023 saw as many as nine Indian unicorns losing 49 per cent value on average, according to a report by early-stage venture capital firm Orios Venture Partners. The pack was led by beleaguered edtech startup Byju’s with a whopping 86 per cent markdown in its valuation from $22 billion. One of its investors BlackRock had reportedly recently cut the value of its holding in the company by 95 per cent to $1 billion.
The other eight startups were Ola with a 35 per cent reduction to $6.7 billion, Meesho (10 per cent to $4.9 billion), Pine Labs (38 per cent to $5 billion), Swiggy (34 per cent to $10.7 billion), PharmEasy (90 per cent to $5.6 billion), Eruditus (9 per cent to $3.2 billion), Oyo (72 per cent to $9.6 billion) and Gupshup (32 per cent to $1.4 billion).
However, the challenging environment, which called for strengthening the bottom line, also led 23 unicorns last year to profitability.
Stock broker Zerodha had $350 million in profit while others including NBFC Five Star Business Finance saw $73 million profit, MakeMyTrip at $70.3 million profit, OfBusiness ($55 million), Groww ($54 million), Infra.Market ($36 million), Lenskart ($4.5 million), Nykaa ($4.4 million), BrowserStack ($4 million), and more.
“This profitability builds momentum towards IPOs and we saw media reports on 13 unicorns planning IPOs in 2024,” the report said. So far, 15 unicorns viz., Mamaearth, Delhivery, Five Star Business Finance, EaseMyTrip, Freshworks, Paytm, Nykaa, Zomato, Policy Bazaar, MaymyIndia, Nazara, IndiaMART, JustDial, MakeMyTrip, InfoEdge have turned public.
“India continued to remain the third largest home to unicorns, taking around five and half years to turn Unicorn in 2023, which is a step up from the average of eight years it took in the preceding 4 years. Interestingly, India also has a good share of female unicorn founders and fair number of repeat founder,” the report added.
From an average of around 13 years taken in 2013 to reach unicorn status by startups, the time to enter the billion-dollar club reduced to just 5.5 years in 2023. While the fastest to attain unicorn status was roll-up e-commerce company Mensa Brands, taking only six months in November 2021 after raising its first $50 million round in May 2021, the slowest was NBFC Five Star Business Finance. Founded in 1984, the company took 37 years to reach the unicorn valuation.
Importantly, funding in Indian startups had dropped to $8.3 billion in 2023 from $25.6 billion in 2022 while funding rounds declined to 1,133 from 2,781, and acquisitions dropped to 127 from 188 in 2022, as per data from startup tracker Tracxn.