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Unicorn startups and how to become one?


Unicorn startups in the global market

In the financial world, Unicorns are privately owned startups presently valued at over USD 1 billion without being listed in the stock market. Generally, tech-based startups like food tech, EdTech, blockchain, and AI, are the most common startups that reach this glory of being called a unicorn. And the startups that are valued at 10 billion dollars are grouped under the term called ‘Decacorn’, which means super unicorn. Example: Dropbox, SpaceX, and WeWork are a few Decacorns.

The term unicorn got popularized by this famous venture capitalist, Mr Ailen Lee, in 2013. It was used basically to describe these rare tech startups or companies that touched this highly covered 1-billion-dollar mark. The total number of unicorns worldwide increased by 24% to 1,312 unicorns, through June 2022. Some of the popular ones are Canva, Byju’s, Google, Facebook, and Airbnb. San Francisco retained the title of ‘World Unicorn Capital’ with 176 unicorns.

ALSO READ: Startup vs corporate: What’s best for your career?

Present status of unicorn startups in India

Getting a billion-dollar unicorn was not so easy during the time of the global pandemic when the market was going through a financial crunch. As of April 2022, India has become the world’s fastest-growing startup. As of Sep 2022, India is home to 107 unicorn startups with a combined valuation of over USD 333 billion. 44 unicorns were born in 2021 with a total valuation of USD 93 billion and in 2022 there were 21 unicorns with a total valuation of USD 26.99 billion. Presently, India is the third largest unicorn startup in the world with 9.3%. In present situations, unicorn startups are not as uncommon as before, but building, growing, and developing a unicorn is not so easy.

InMobi was the first company to become a unicorn in India in 2011. Following several startups reached the 1-billion-dollar valuation. India’s unicorn count started with 11 numbers till the year 2015 and a significant growth of 100 unicorns by the year 2022. Though these unicorn startups are growing at their regular phase, the financial performance of these startups is highly questionable. As per Fintract, a data tracking platform, out of 100 unicorns in India, only 18 have attained profits in the financial year 2021 and 57 unicorns are in deep loss. The remaining 25 are mostly registered outside India either in Singapore or in the US, where these companies have not revealed their P&L figure. 

(Inc42, 2022): As per the source from Inc42. India has shown significant growth of a 15% increase in new startup launches as of 2021. 

Out of 39,960 active startups:

  • 18.7% are from Enterprise Tech
  • 12.8% are E-commerce
  • 12.1% are from FinTech 
  • 9.5% are from Consumer Service 
  • 8.9% from Health Tech
  • 8.0% are from EdTech
  • 7.9% from Media & Entertainment
  • 6.9% from Deep Tech 
  • 15.2% are from other sectors. 

As on May 2022, the top 3 unicorn sectors are E-commerce, FinTech, and Enterprise Tech.

As per Entrackr, media reports, the top 10 profit-making unicorns during FY21 are:

  • Zoho with Rs.1,917 crores
  • Infoedge with 1,409 crores
  • Zerodha with 1,122 crores
  • Five-star with 359 crores
  • Dream11 with 327 crores
  • Billdesk with 246 crores
  • First Cry with 216 crores
  • Games24*7 with 110 crores
  • Nykaa with 61.4 crores
  • OfBusiness with 55.7 crores

In the above profitable unicorns, Games24*7 only has managed to enter the unicorns list for 2022. Rest other companies have entered coveted club either in 2021 or before. 

As per Statista, NPCI, Bain & Company, and App Annie, there is a significant growth in internet users since the pandemic. It has been estimated that there will be 1.3 billion+ internet users by 2030. 44 per cent of internet users has increased in India. On average, a person spends 4.7 hours per day on mobile internet. There is over 87 billion volume of UPI transactions happening in India with a 1.8 trillion value. About 305 million users are doing online transactions in India and over 373 million internet users are from the rural sector.

Geographic breakdown of unicorn startups in India

In India, Bengaluru has shown significant growth in startups and stands in first place in India with 39 unicorns like Amagi, Apna, Byju’s, CRED, Flipkart, PhonePe, Licious, Meesho, Mensa, Swiggy, OLA, Zerodha, InMobi, etc.

The second largest place in India with 32 unicorns in Delhi NCR with unicorns like MakeMyTrip, CARS24, Shopclues, Spinny, Paytm, Zomato, etc.

The third largest city in India with 16 unicorn startups is Mumbai with startups like Games24, UpGrad, PharmEasy, BillDesk, Acko, CoinDCX, etc. The other cities like Pune with 6 unicorns, Chennai with 5 unicorns, and Hyderabad with 2 unicorns

As per Entrackr, the top 10 loss-making unicorns during FY21 are:

  • Oyo with Rs.3,944 cr loss
  • Udaan with Rs. 2,482 cr loss
  • Flipkart with Rs. 2,446 cr loss
  • Eruditus with Rs. 1,934 cr loss
  • PhonePe with Rs.1,728 cr loss
  • Swiggy with Rs.1,617 cr loss
  • Unacademy with Rs.1,537 cr loss
  • Freshworks with Rs. 1,499 cr loss and 
  • ShareChat with Rs. 1,461 cr loss

READ MORE: India: A start-up-friendly nation for youth

Why do new unicorns fail?

One of the major reasons is that startups are overvalued at the early stages which leads to trouble faced by such unicorns at later stages. Reasonable assumptions must be there in the growth process of the startups, it may lead to great operational disaster. 

According to entrepreneurs, owners, experts, and top management of the business, the reasons behind such failure include running out of money for business, targeting the wrong market, lack of research, poor partnerships, inefficient marketing strategies, and lack of expertise.

How are startups evaluated?

The growth and success of every unicorn startup are determined by how much disruptive impact it has on its chosen market. Example: UBER and OLA.

The top 10 fastest unicorn startups in India by taking less time to become unicorns are Mensa – it became a unicorn in 6 months, Globalbees in 7 months, CredAvenue in 1.5 years, Paytm Mall 1.6 years, Glance in 1.8 years, OLA Electric in 2.1 years, PharmEasy in 2.2 years, Apna in 2.4 years, Spinny in 2.9 years and CRED in 3 years.

But, speaking about their valuations is to find out how these start-ups are evaluated so that they can be called unicorns. Valuation does not only depend on how well it is performed at a financial level as there are so many startups that have hardly generated any profits in their beginning. The valuation of any startup highly depends on how its investors and venture capitalists (VC) feel about the company’s future performance. For this, the investors typically use strategies like looking at the company’s management, which could be future earning prospects, market size, technological innovations, the market value of tangible and intangible assets, and so on. Once startups start filling these requirements and when their business model gets picked up then, they can be on their path to becoming a unicorn.

As a startup owner, there are certain key points that you keep in mind before valuation and presenting your business model to VCs to reach unicorn status.

  1. Present a simple solution to an existing problem like the owners of Canva integrated various design forms on a single platform
  2. Present a clear vision of the company’s prospects and the products and services you would offer
  3. Making a stronger and high market value proposition
  4. Having potential beta testers (to uncover bugs & issues) and customers before the actual product/service release
  5. Having an easy-to-use user interface that allows customers to adapt quickly to the product and buy often
  6. Know the ins and outs of the company have confidence in your plans and make a business proposition that is strong and marketable

Characteristics of unicorns that keeps them separate from normal startups

  1. Privately owned and get more funding: They Adopt fast growth strategies like firms can go through as many rounds of funding as possible in a very short period, this eventually helps them stay ahead of the competitors and overtake the market in a short span
  2. First & ground-breaking innovations: These kinds of startups possess as pioneers and first innovators in their field and create a space for them naturally in the market by changing the ways things are being done. Examples: Google, which revolutionized how the search engine operates, and Uber which changed the way people commute.
  3. Consumer-focused: These startups are consumer-driven. Simplifying problems and making life easier for their customers is the main propriety of these startups. Such type of customer-driven startups attracts a huge pool of customers. Example: Canva.
  4. High technology: Finally, these startups are very advanced when it comes to technology like AI & ML. Their main focus is to provide a super-easy user interface and make their customer’s life easier.

Methods to overcome failure

Startup companies must – 

  • Set clear goals with a long-term vision and mission
  • Intensive research must be done on their target market and target audience well in advance before formulating assumptions, setting goals & strategies  
  • Startups must work towards building sustainable growth and development rather than working and anticipating a quick, short-term bump in profits
  • The organization must do its work as a team with the spirit of passion and love
  • Once started should never quit and become go-getters

Lucy Lin the founder of Airwallex, and a member of the unicorn club says “know your business and your competitors inside out, otherwise, why would they trust you with their money and why would they support you?”


Though we understood how to build a startup and make it a unicorn, growth and sustainability are challenging in this competitive market. Futuristic strategies, quick learning, and implementation of machine learning and artificial intelligence in the market with intelligent innovations as a pioneer in the chosen market to solve customer problems and being engaged with the focused customers are the keys to becoming successful unicorns.


Agrawal, B. (2021, June 02). India: An Emerging Nation of Unicorn startups. Retrieved from https://blog.iilm.edu/: https://blog.iilm.edu/india-an-emerging-nation-of-unicorn-startups/

Ashrafi, H. U. (2022, May 10). India minted 100 unicorns but how many of them attained profitability? Retrieved from entrackr: https://entrackr.com/2022/05/india-minted-100-unicorn-but-how-many-of-them-attained-profitability/

B, T. (2022, 09 02). 15 Indian business unicorns to learn from. Retrieved from in.godaddy.com/blog: https://in.godaddy.com/blog/15-indian-business-unicorns-to-learn-from/

CHADHA, S. (2022, jan 21). In charts: India could add another 45 startup unicorns in the next 12-18 months. Retrieved from timesofindia: https://timesofindia.indiatimes.com/business/india-business/in-charts-india-could-add-another-45-startup-unicorns-in-the-next-12-18-months/articleshow/89032465.cms

Inc42. (2022). Unicorns of India, Decoding India’s 100 Unicorns Report. Inc42.      


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