Unicorns are mythical creatures, you say. Well, not in the Indian unicorn startup scene. The Indian unicorn startup ecosystem has witnessed great highs over the past years.
The first Indian startup to make to the $1 billion or the unicorn club was InMobi. It is now all set to launch its IPO with a US listing. InMobi became a unicorn in 2011, and many more Indian startups have followed suit ever since. Only four months into the new year and 10 Indian startups have already made it to the list.
The past week has been equally and positively eventful, with six Indian startups that have made their way into the unicorn club 2021.
Here are the stars of the unicorn week:
- Meesho: A startup that offers a platform for social commerce
- Cred: A platform that allows members to track and pay their credit card bills
- Groww: Investment app for the youth
- ShareChat: Social networking platform
- Gupshup: A startup that offers messaging services
- Pharmeasy: online medical platform
Ever wondered why these startups with a valuation of over $1 billion are termed unicorns? A venture capitalist Aileen Lee devised this term to indicate that just like unicorns are mythical, these billion-dollar companies are rare. With so many success stories, we are all tempted to refute the perception that there are not many unicorns.
But, let’s face it. A unicorn for once is not a unicorn forever. There are Indian startups that were once unicorns but now lost their valuation because investors chose to reduce their stake.
Based on the information by Venture Intelligence, below are some Indian startups that were once unicorns but not anymore:
- Snapdeal: Snapdeal is one of the first companies that emerged unicorns in India. In 2016, it stood at a valuation of $6.5 million. There were also prospects of a merger with Flipkart, but they turned down Flipkart’s offer of $850 million. The company has been through tough times ever since. They are now striving to reverse the damage and move towards success with about 850 crores in FY20. Interestingly, Flipkart is no longer a Unicorn either.
- Quikr: This online marketplace that is also a classified site, was founded in 2008. It makes it possible for users around the country to buy, sell or rent. It is a diverse platform where you can find everything from cars to baby gear to jobs. It entered the unicorn club in 2015 with a valuation of $1.5 billion. However, fraudulent transactions by some dealers and vendors made one of the investors, Kinnevik AB revise the investment by 45%. It stands at a current valuation of $550 million now.
- Hike: Hike joined the billion-dollar club in 2016 when it raised huge funding of $175 million. Foxconn and Tencent were the major investors. With the ambition to surpass WhatsApp and emerge as a super app, Hike also came up with a payment platform. However, Hike failed because it couldn’t garner a user base comparable to WhatsApp. After the launch of Jio in 2016, the number of internet users increased in India but favored WhatsApp. Hike stayed a niche app, and the head Kavin Bharti Mittal tweeted in January 2021 that Hike StickerChat would be discontinued and the company would focus on vibe and rush.
- Shopclues: Shopclues was founded in 2011 as an online marketplace that listed utility items, kitchenware, electronics, fashion products, etc. It assumed unicorn status in 2016 with a valuation of $1.1 billion. It, however, could not sustain the status and the competition from others such as Amazon and Flipkart that kept moving forward by strengthening their offerings. Experts in the industry blame it on the failure of Shopclues to be disruptive. Reports show a decline in the revenue to Rs.97 crore in FY20 from Rs. 209 crore in FY19. Qoo10, a Singapore-based company, acquired Shopclues in 2019 at a valuation of only $80 million.
According to information by Venture Intelligence, there are currently 43 Indian unicorn startups. These include startups across domains such as eCommerce, e-pharmacies, e-content, data analysis, etc.
Isn’t it interesting that the unicorn term makes sense? The above examples show how it is true for multiple Indian Startups. While it takes a lot of effort for startups to become unicorns, it takes even more to maintain the status. With varied reasons for these declines, only a few will maintain the status and stay there.