A look into five startups that became unicorns this year.
Within the first five months of 2021, nearly 170 companies joined the unicorn club – 40% more than the total in 2020. Most of these unicorns are from the technology and communications industry followed by finance and insurance, and health and pharmaceuticals. In India alone, startups raised over US$20 billion by July 2021. There was a sudden surge in funding across the country as 21 startups became unicorns.
A unicorn is any company with a valuation of over US$1 billion. Here, we take a look at five startups from around the world that became unicorns in 2021.
Digit insurance became the first Indian unicorn of 2021 in January. In the last three quarters of 2020, the company grew by 31.9% with a valuation of US$800 million. The company raised US$18 million from existing investors, including A91 Partners, Faering Capital and TVS Capital. On January 15th, the company announced that it achieved a valuation of US$1.9 billion.
Digit Insurance is a Bengaluru-based insurance-tech startup founded in 2016 by Kamesh Goyal and Prem Watsa’s Fairfax Holdings. The company aims to simplify insurance for its users. Overall, the company has raised US$200 million to date from internal and external funding.
2. Meesho
Meesho, the social commerce company, raised US$300 million in a funding round led by the Japanese company SoftBank Group Corp. After the funding, the company’s valuation reached US$2.1 billion, making it a unicorn in April 2021. Meesho connects producers with resellers who market the products on social media using WhatsApp and Facebook.
In an interview after its valuation, the founder and chief executive of Meesho Vidit Aatrey said, “We will use the capital in three ways — team building and strengthening our senior leadership; [investing] a lot in creating awareness of the business even in smaller towns; and [funding] new initiatives like our new grocery vertical ‘Farmiso’. We will focus on growth over the next couple of years and maybe then consider an IPO.”
3. CRED
With a valuation of US$2.2 billion, Bengaluru-based fintech startup CRED became a unicorn in April 2021. The company raised up to US$300 million in a new funding round. In a company memo, founder Kunal Shah announced a US$5 million employee stock ownership plan (ESOP) buyback.
CRED launched in 2018 to help users pay their credit card bills easily and earn rewards. On how he will use this unicorn status and funding, Shah shared, “We have chosen the conscious path of focusing on growth over monetization. Today, Cred controls 22% of all credit card payments in the country, and our focus is to grow this market share.” He declared that the company will scale its growth and revenue levers. They also want to expand their user base, even if it means incurring a short-term loss.
4. Pacaso
Pacaso, a United States-based real estate company, became a unicorn in March 2021, within five months of launching. The company, founded by Austin Allison and Spencer Rascoff, is valued at US$1 billion. It specializes in helping people buy second homes at affordable rates. Pacaso plans on using its funding of approximately US$90 million to accelerate its growth. As per CEO and co-founder Spencer Rascoff, “The reason that [Pacaso] is growing so quickly is because consumers love the concept, and they love the idea of being able to own a second home at a much less expensive price metric.” According to Crunchbase data, Pacaso is the first company to become a unicorn this fast.
5. Gorillas
Gorillas is a Germany-based on-demand delivery service. In March 2021, it became the fastest unicorn in Europe. Within nine months of its launch, Gorillas raised funding of nearly US$300 million, valuing it over US$1 billion. The company promises 10-minute delivery from the cart to your doorstep with a delivery fee of only US$2.34. It plans to distribute EUR 1 million among its community of drivers.
Gorillas will use the new funding of nearly US$300 million to further drive growth. The company is looking to expand to over ten countries and 50 cities, including Paris and New York. In an interview, the CEO and founder of Gorillas Kağan Sümer divulged, “We’re radically focused on our customers and their needs: With a team of more than 2000 people and by working closely with our community, our investors and our partners, we’re building an infrastructure for the fastest last-mile delivery of essential human needs.”
The recent funding spree indicates that more startups can expect to become unicorns this year. As per an earlier NASSCOM report, India will have 50 unicorns before 2021 ends.
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