The `Hurun Report` according to its website ‘’ is a leading research, luxury publishing and events group established in London in 1998 with a presence in India, China, France, the UK, the USA, Australia, Japan, Canada and Luxembourg. It is widely recognised world-over for its comprehensive evaluation of the wealthiest individuals across the globe. Hurun Report is the largest compiler of the rich list globally.’’ The report’s credibility is `24 carat`, to put it mildly, and its findings are widely quoted worldwide.
So there was much gaga and hoopla when a Hurun India study suggested that the country had overtaken Britain to be placed third with 54 unicorns. Imagine, India’s Silicon Valley city of Bengaluru now has more unicorns than Boston, Palo Alto, Paris, Berlin, and Chicago. The one-time Garden city, now a concrete jungle, has over 28 unicorns, the seventh highest in the world for one single city. So what’s a unicorn? In simple terms, a unicorn is an unlisted company whose valuation puts it over the US$ one billion category. The last Hurun report said that India now has 54 unicorns–33 more than in 2020, while the UK has 39 unicorns—a dozen more than the previous year.
Believe it or not, over 65 unicorns have been launched by Indians outside the country and India is also the number one destination for immigrant unicorn creators. Interestingly, Hurun research noted that “2021 is the most successful year in history for unicorns,” with 1,058 unicorns in the world, almost double of the 586 in 2020.
What is it that is driving this bumper crop of unicorns in India (that produces three unicorns a month)? There is little doubt that this will only gallop in the coming years and the numbers reflect the spirit of innovation and entrepreneurship in India and the huge appetite of venture capital and angel investors for ideas from the subcontinent.
According to Tracxn (founded in 2013 by ex-venture capitalists, Tracxn is one of the world’s largest platforms for tracking 1.4 million entities across industries, sectors, sub-sectors, geographies, affiliations and networks globally) and quoted by the Hindu Businessline, ‘’China has the secondhighest number of unicorns in the world at 177, which is more than twice of India’s 72, data from Tracxn showed. In just five years, 2015-19, China produced 136 unicorns, which is more than 75 per cent of its total. In contrast, India’s unicorn numbers are surging only of late. During the decade from 2011-19, India produced only 22 unicorns.’’
The silver lining is that over 40 per cent of the country’s unicorns have come in 2021 and with FDI getting more and more robust and the startup ecosystem getting a leg up from the Government, there is enormous potential going forward. But there are hiccups; for example, the early-stage funding for Indian start-ups was the lowest for 12 months in May and the late-stage inflow dropped below the $1-billion mark for the first time in 12 months according to Tracxn And yet, the country had more unicorns in the five months of 2022 than in the first six months of the previous year. This year by May we had 14 unicorns—one more than in the first half of last year. Speaking at a recent event, Minister of State for Science and Technology Jitendra Singh said out of every 10 unicorns across the world, one is Indian. According to him, India had grown from a few hundred to over 70,000 start-ups in the last decade.
So are there any pitfalls? Do we need to be cautious? Are we growing at an unnaturally fast clip? According to one interesting piece of data from Tracxn quoted by Moneycontrol, ‘’73 of India’s 100 unicorns have at least one director from one of the country’s 23 IITs. The 73 unicorns have founders from seven of the 23 IITs, with IIT Delhi, leading the group’’
As the LSE in a blog post–India’s startup explosion: more pitfalls than promise—explained: ‘’By and large, foreign investors have shown a preference for investing in start-ups founded by the alumni of the Indian Institutes of Technology (IITs) and/or the Indian Institutes of Management (IIMs) and the Indian Ivy League universities. However, viewing academic pedigree as a proxy for entrepreneurial ability can lead to poor investment decisions. Investors need to look beyond academic degrees while evaluating entrepreneurs and discern more relevant signals such as social capital, technological competence, founding team experience, start-up alliances, patent applications, access to government grants, or even affiliations with third parties or other venture capitalists Partnering with local incubators and accelerators can also be a good way for foreign investors to test the Indian start-up waters.’’
“Even during the good days earlier, only a few companies would become big. But in the past year, 42 unicorns have been made. These billion-dollar start-ups are proof of India becoming aatmanirbhar (self-dependent) and our country’s aatmavishwas (selfconfidence),” Prime Minister Narendra Modi said in January while speaking to start-up enthusiasts.
This aatmavishwas has to percolate down to the Tier-2 and Tier3 cities. When the country starts to produce unicorns routinely from the hinterland, India will have truly arrived as a country geared to innovation and entrepreneurship.
