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BENGALURU : Bengaluru: The first eight months of the year saw the birth of seven unicorns in India’s startup ecosystem, software industry body Nasscom said in a report, even as 52 others which have received over $50 million investments wait to join the list.

The number of India’s potential unicorns—a term to describe startups valued at $1 billion—more than tripled from 15 last year to 52 in 2019, becoming the world’s largest pipeline of unicorns in the making, Nasscom said in its report ‘Indian Tech Start-up Ecosystem – Leading Tech in the 20s’.

India’s newest unicorns include Delhivery, a logistics startup; Icertis, which provides cloud-based enterprise contract management; Dream11, a gaming startup; Druva, which provides cloud data protection and management; Ola Electric, the electric vehicle arm of cab hailing firm Ola; and Rivigo, a logistics firm.

With the latest additions, India now hosts 24 unicorns, the third-highest number of unicorns in a single country in the world.

Around 71% of 2019’s unicorns are business-to-business (B2B) focused, while 57% are from emerging and nascent sectors such as gaming, automotive and supply chain/logistics, according to the report.

Software and robotics platform GreyOrange, card processing company Pine Labs, online car marketplace CarDekho, online grocer Grofers, fintech start-up LendingKart, online truck aggregator Blackbuck are some of the potential unicorns at present.

“...Financially and strategically speaking, what’s been more important for us is to grow fast, but at a profitable scale. If growth comes at the cost of profitability, that is not something we support, and hence, we have been cautious about (rapid) growth. You can’t compromise on margins for growth, because that’s not sustainable," said Hari Menon, chief executive of Bigbasket, which became a unicorn in 2019.

Menon added that grocery is a complex business due to large stock keeping unit (SKU) count, and, on a single average high-value order, Bigbasket may end up delivering anywhere between 20-25 SKUs.

(Graphic: Sarvesh Kumar Sharma/Mint)
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(Graphic: Sarvesh Kumar Sharma/Mint)

“But with more players coming into the segment with large varieties of SKUs, it will only increase customer trust in online grocery delivery since it will house all the SKUs in a single place. And as these companies grow to bigger valuations, it is only going to give more validation to the segment," Menon said over the phone.

Atit Danak, manager and head of CoNXT, consulting firm Zinnov’s startup collaboration practice, said these unicorns and potential unicorns are present across 13 sectors, in both domestic and global markets. The Nasscom report was commissioned along with Zinnov.

“It is a very good composition in terms of the number of sectors these startups are coming from and the kind of markets they are going after. There are also companies like Khatabook (a mobile app that enables small and medium enterprises track business transactions) that is going after a very India-specific problem. It is a healthy mix of startups," Danak said.

Nasscom president Debjani Ghosh expects two or three more unicorns to be added to the list by the end of the year.

According to her, the number of Indian unicorns could increase to 95-105 by 2025.

Meanwhile, India continues to be home to the third largest startup ecosystem in the world, having added more than 1,300 tech startups in 2019.

Between January and September, there were 8,900-9,300 tech startups, compared with 7,700-8,200 in the year-ago period, according to the Nasscom report.

The volume of investments in startups also grew, touching $4.4 billion for January-September across 450 startups up 5% from the year-ago period. Early-stage funding too saw a 45% spike, with $1.6 billion being recorded in 2019.

Startups created 60,000 direct jobs in 2019 alone, compared with 40,000 jobs in 2018.

“The next wave of growth will be at the junction of convergence of technologies, where different sectors will embrace digital to re-define their operations," said Nasscom’s Ghosh.

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