Four Indian startups—Nykaa, Unacademy, Postman and Razorpay —emerged as unicorns while the pandemic was at its peak.
India is expected to be home to 60,000-62,000 startups, including 100 unicorns, by 2025, despite the huge impact of covid-19 on India’s startup ecosystem, said a report jointly prepared by TiE- Delhi, a not-for-profit promoting entrepreneurship, and Zinnov, a global management and strategy consultancy.
The report, Covid-19 and the anti-fragility of Indian Startup Ecosystem, said there was a dip in overall funding by 50% during the lockdown, compared to pre-covid levels, while around 40% startups were negatively impacted. It said 52% of Indian startups had struggled to raise additional funding after the covid-19 outbreak, while 15% were forced to discontinue operations.
However, four Indian startups—Nykaa, Unacademy, Postman and Razorpay —emerged as unicorns while the pandemic was at its peak. India is on track to having at least eight new unicorns in 2020, on a par with the 2019 numbers, taking the total number of Indian unicorns to 33.
“Although the immediate impact of the lockdowns on the Indian startup ecosystem was severe, we were amazed to witness how quickly Indian founders acted to reimagine their businesses. What has been most impressive is how many startups have reduced (cash) burn and improved unit economics very rapidly," said Rajan Anandan, president, TiE Delhi-NCR.
According to the report, the covid-led shift to digital consumption provided the necessary tailwind to education, healthcare, and commerce, while several other sectors such as travel, hospitality and mobility, which were negatively impacted, are now on a recovery path. Around 75% startups are gradually, but steadily, recovering post-lockdown, while 30% have pivoted to new markets for alternative revenue streams. It said tele-consultations and online fitness jumped five times, while edtech was the single biggest beneficiary of the pandemic. The number of online learners in India has grown from 45 million in 2019 to 100 million by end-August, with 3.6 times growth in funding raised by edtech platforms in 2020, compared to last year.
Similarly, online health platform Practo witnessed 500% growth in online consultations during the lockdown, while fitness app Fittr registered $10 million revenue bookings run rate, and 2.5 times growth in the five-month period.