India’s future unicorns worth $49 billion: Hurun Research Institute report

India’s future unicorns, including Shiprocket, Zepto, Turtlemint, Pepperfry, Juspay and Ather Energy, are currently worth $49 billion, a 36% jump in value compared to last year, a report by Hurun Research Institute showed.

The report by the research house is a ranking of privately held Indian startups that were founded after the year 2000, worth at least $200 million and expected to turn unicorn in the next 2-4 years. Unicorns are privately held startups valued at $1 billion or more.

“In just one year, the number of unicorns in the country has grown by 65% in 2021...Probably the pandemic has hastened the disruption of traditional businesses and helped in the ascendancy of the startups,” said Anas Rahman Junaid, managing director and chief researcher, Hurun Research Institute

According to the report, Hurun has classified 17 startups, including logistics platform Shiprocket; quick commerce entity Zepto; insurtech player Turtlemint; electric vehicle venture Ather Energy; financial services provider Vivriti Capital; mobility startup Rapido and financial software platform Clear (formerly ClearTax), which are expected to attain unicorn valuations in the next two years.

The report lists the likes of furniture startup Pepperfry; payment infrastructure providers Juspay and Mswipe Technologies, as well as buy-now-pay later startup ZestMoney to reach unicorn valuations in the next four years.

“There are some concerns in the global economy that can impact the valuations and capital raising ability of Indian startups. Moreover, some Indian startups are also going for layoffs and cost-cutting measures,” Junaid said in the report.

The startup ecosystem has seen a sharp slowdown in venture funding and many startups including Unacademy, Vedantu, Udaan and Meesho have fired employees to conserve cash and extend their runway.

Global investors such as Sequoia Capital have also cautioned entrepreneurs about turbulent financial markets, signalling a reluctance among investors to write large cheques.

“We believe that there could be a blip in the growth story in the short run...The pinch felt in the valuation exercise and extra scrutiny of deliverables could help in broad-basing the system,” Junaid added.

Sequoia, which invested in 39 probable unicorns in 2021, is the most active investor in the ASK Private Wealth Hurun India Future Unicorn Index 2022, followed by Tiger Global with stakes in 27 future unicorns.

“Sequoia… has some big companies in its kitty like Classplus, DeHaat, Porter, Progcap and CityMall,” the report said.

Bengaluru has the third-highest number of tech startups in the world followed by Delhi-NCR and Mumbai, it said.

The cumulative revenue of future unicorns increased by 65% in FY21 to Rs 16,448 crore, according to the report. The report highlighted that 15 companies featured in the ASK Private Wealth Hurun India Future Unicorn Index 2022 have a woman co-founder.

Analysing top sectors that have a high valuation, the report named fintech followed by ecommerce, Software-as-a-Service (SaaS) and edtech as sectors with the highest cumulative valuations.

“Fintech segment has a cumulative valuation of $11,550 million, ecommerce has a valuation of $6,130 million and SaaS has a valuation of $2,900 million,” the report showed.

There are 27 fintech future unicorns in India and more than 50% of the fintech future unicorns are in the consumer lending business, it said.