Unicorn Club 2020: 8 Startups That Became Indian Unicorns

The latest in the Indian subcontinent’s race to establish itself in the global innovation and tech landscape: here are eight Indian unicorns that worked their way into the billion-dollar club this year.

Unicorns have become nothing short of a buzzword in 2020. In a span of seven years, the number of unicorn companies per year has multiplied from four to 82. CB Insights estimates that there are over 500 unicorn companies in the world today, with a total cumulative valuation of about US$1.6 trillion.

According to Hurun Research, India staked claim to 21 unicorns as of early August, (although it recognized several other Indian unicorns that were headquartered outside the country). With the addition of three new Indian unicorns since then, there are now a total of 24 unicorns on the subcontinent.

While this is far behind world contenders U.S. and China, India’s unicorn ecosystem competes closely with the likes of U.K., South Korea and Germany. Even as the country adds impetus to its startup sectors, here are the companies that made the cut this year.


Time to unicorn: 5 years

Online used car sales platform Cars24 was the latest to join the cohort of Indian unicorns this year. The company raised $200 million in Series E funding in November this year. The round was led by DST Global, and took the company’s valuation to $1 billion.

The funding also marked a surge in valuation worth half a billion a year after its previous fundraise. Its last funding round, a $100 million Series D, valued the company at $500 million. The company has also taken on some debt. It secured INR100 million, around $1.4 million, in debt funding from Vivriti Capital in July this year.

Cars24 is one of the companies to have received a boost from the rapid transformation that overtook the world due to the global pandemic. By the end of India’s strict lockdown in the middle of the year, the company’s sales grew 20% from pre-lockdown levels. The company is now looking to gross $600 million in annual revenues. Its annual transactions have exceeded 2,00,000 units so far.

The pre-owned car selling platform also sells two-wheelers, and holds a non-banking financial institution license from India’s central bank. The license allows it to extend loans to customers and vehicle dealers. The company was founded in 2015.


Time to unicorn: 5 years

This Indian unicorn and Byju’s rival has seen its valuation soar this year. It kickstarted the year with a Series E fundraise of $110 million from Facebook and General Atlantic. The round valued the edtech company at $510 million post-money.

It reached a valuation of $1.45 billion in September this year, when it raised $150 million in funding. SoftBank’s Vision Fund 2 led the round.

The startup went on to raise additional funding from two marquee investors, this time at a valuation of $2 billion. Tiger Global Management and Dragoneer Investment Group reportedly invested $75-100 million in Unacademy in this round.

The edtech unicorn also made a string of acquisitions this year. So far, it has acquired Indian startups Kreatryx, CodeChef and Coursavy for undisclosed amounts, and PrepLadder for $50 million. It also acquired a $5 million majority stake in Mastree.

Unacademy was started as a YouTube channel by Gaurav Munjal 2010. Co-founders Roman Saini and Hemesh Singh joined Munjal in founding Unacademy as an edtech company in 2015. Its investors include Sequoia India, SAIF Partners, and Nexus Venture Partners.


Time to unicorn: 6 years

API platform Postman went from a $1 million seed round to status in six years, with $208 million in total funding (according to Crunchbase data). Of this, the company raised a sizable 72% in the same round that helped it cross $1 billion in valuation.

A year after being founded in 2014, the company raised seed funding of $1 million from Nexus Venture Partners. Nexus Venture Partners also led the company’s Series A in 2016 for $7 million. Postman’s next funding round came in 2019, where it raised $50 million from Nexus Venture Partners and CRV.

This year, Postman reached unicorn status after it raised $150 million in a Series C funding round in June. With the Series C, the company’s valuation reached $2 billion. The Series C funding was also 2.5X what the company had raised in toto before the round.

Postman’s time to unicorn is also the fastest for a SaaS company from India, MoneyControl reports. It beat Freshworks by two years­–the popular customer engagement SaaS solutions provider took eight years to unicorn and is currently worth $3.5 billion.

Founded in Bengaluru, the company is currently headquartered in San Francisco. Over 13 million developers and 500,000 companies use Postman, according to a recent statement by the company.


Time to unicorn: 7 years

Razorpay zoomed past the $1 billion mark in October this year, after it raised $100 million in a Series D round. The round was co-led by GIC, the sovereign wealth fund of Singapore, and Sequoia Capital India. It also made Razorpay the first neobank to become an Indian unicorn, according to a company announcement.

Razorpay counts some of India and the world’s biggest companies as its customers. This includes big techs Facebook and Google, Wikipedia, and other fintechs such as Zerodha and Khatabook, and Indian unicorns Byju’s, Zomato, and OYO.

Including its Series D, the company has raised over $200 million across several rounds since being founded in 2013.

Razorpay has secured relationships with some major partners in recent time.

On December 2, it partnered with global payments service provider PayPal to enable local MSMEs and freelances to receive international payments. The partnership allows RazorPay’s partner businesses to integrate with PayPal, and receive payments from 200 markets. It also secured a partnership with Visa last month over a commercial credit card solution for small businesses.


Time to unicorn: 8 years

Nykaa is a popular beauty and personal care ecommerce aggregator in India. It became a ‘soonicorn’-companies that are expected to become unicorns in the near future-after it raised INR1 billion ($14 million) in funding from TPG Growth last year.

The company was worth $724 million after the deal, $200 million more than its valuation after a 2018 fundraise of INR1.13 billion from Lighthouse India.

In April this year, Nykaa raised another INR1 billion ($13 million) to cross the billion dollar mark. The funds were raised from existing investor Steadview Capital, and valued the company at $1.2 billion. It topped this up with additional undisclosed funding from Fidelity Investments last month.

The company was founded by former banker Falguni Nayar in 2012. In her previous avatar, Nayar was the Managing Director of Indian investment bank Kotak Mahindra Capital. Today, she’s one of the six wealthiest female entrepreneurs in India.


Time to unicorn: 10 years

Zerodha is an online stock brokerage company founded in 2010. It is known for its pioneering retail trading platform Kite, which has made it popular among both experienced and first-time traders.

Zerodha is popular for one other thing­–bootstrapping itself to Indian startup success and profitability. It became India’s largest stock broking platform and one of the latest Indian unicorns without raising a single dollar in external investment.

Zerodha became a unicorn after an ESOP buyback in June this year at a self-assessed value of INR70 billion, or nearly $1 billion. Co-founder Nithin Kamath noted that this valuation is ‘conservative’–the company is worth $3 billion according to the Hurun Global Unicorn List of 2020.

Interestingly, this valuation is based on the price-to-book value ratio of Zerodha’s competitor ICICI Direct, a retail trading and investment service by Indian financial conglomerate ICICI. Thus, the $1 billion figure was arrived at by valuing Zerodha as a brokerage firm, not a tech company. Kamath admitted that their valuation would be much steeper had they been valued as a tech startup.

“Valuation etc. really matter only if you intend to sell a portion of your company, otherwise it is just a vanity metric which doesn’t really mean anything,” Kamath told Business Insider about the valuation.

Users on the platform have grown exponentially over the past few years. Its user base grew 40X to reach 2.8 million in the last five years. About a third were added post COVID-19, from March to June.


Time to unicorn: 10 years

In February this year, FirstCry made headlines with a fundraise of $150 million from SoftBank’s Vision Fund. The funding propelled it to unicorn status.

The $150 million funding is part of the company’s ongoing Series E. SoftBank will be investing a total of $400 million into the company in this round. It had already invested around $149 million into the company last year. FirstCry is slated to receive an additional $100 million in January 2021.

The deal, which gave SoftBank a 40% stake, valued the company at $1.2 billion, Entrackr reports. According to FirstCry’s website, the deal was sealed in 2018.

FirstCry is an ecommerce platform focusing on baby and mother care products founded in 2010. The company reported a jump of 65.8% in its revenues for fiscal 2020, reaching INR8.8 billion (around $120 million at current rates). It also cut its losses by 82.5%.

The company notes on its website that it engages with 13 million “unique parents” every month. Apart from featuring products from 6000 brands on its website, it also offers pregnancy and parenting insights through regional blogs, and learning apps under the brand PlayBees.

FirstCry also had an ecommerce logistics division called XpressBees. Co-founders Amitava Saha and Supam Maheshwari later spun off the company in 2015.

Pine Labs

Time to unicorn: 22 years

Pine Labs became the first company to cross the $1 billion mark in India this year. It is also the Indian unicorn to have taken the longest time to have reached here.

Founded in 1998, Pine Labs is a merchant payments solution provider. Some of its prominent investors include Temasek, PayPal, Flipkart and Sequoia India (which owns 42.53% of the company).

In late January this year, the company announced that it had received investment from MasterCard. While the company did not disclose terms of the deal, it is reported to have driven the company’s valuation from $900 million as of 2018 to north of $1 billion, according to the Financial Express.

Under the deal, the two companies will collaborate over in-store and online installment financing and value-added solutions. The company process annual payments worth $30 billion, it said in the announcement.

Pine Labs launched as a card-based payment and loyalty solutions provider for the retail petroleum industry in India. It started offering merchant solutions only 11 years later, in 2009. By 2012, its cloud-based unified point-of-sale platform became central to the brand’s narrative.

It also marked “the beginning of a renewed journey,” the company’s website says. Pine Labs eventually expanded its solutions across payments, risk assessment, multi-channel analytics, merchant lending and insurance, brand offers, cashback, and integrated billing.

The list of the latest Indian unicorns points towards dominant industries within India. It reaffirms Hurun Research’s findings that ecommerce and fintech dominate the unicorn club in the South Asian country. Of the eight entrants, a majority are either ecommerce or fintech companies.

Hurun Research also points to another interesting fact. While India is home to 24 unicorns, in reality, many more exist but are based outside India, much like Postman.

In fact, two-thirds of Indian unicorns are based abroad, mostly in the U.S. So while Indian startups continue to be lucrative opportunities for VCs, perhaps the ecosystem needs to be more sensitive and responsive to the priorities and needs of Indian founders.

Header image by Marian Beck on Unsplash


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