Mumbai: On average, a startup will take 5.5 years to become a unicorn in India in 2023, revealed the latest Orios Venture Partners report.
Years to become a unicorn in India
The early stage venture capital fund’s Indian Tech Unicorn and Exits Report 2023, the average number of years to become a unicorn in India have fallen from 8.4 years in 2022 to 5.5 years in 2023.
The decrease in the average number of years for a startup to become a unicorn signifies the enormous support available today in the form of mentorship and funding or capital. However, India witnessed only 2 unicorns in 2023 but continues to be the third-largest nation in the world in terms of total count of unicorns.
Fall in Funding
Startups in India raised only $8.2 billion in 2023, which is a sharp 72% fall in funding compared to 2022 with $25 billion in funds raised, the report revealed. In 2023, the E-commerce sector outpaced SaaS in terms of the highest number of funding rounds.
Rise in Startup IPOs
Despite a substantial fall in funds raised in 2023, the number of startup IPOs increased to 8 in 2023 compared to 4 in 2022. Also, 123 acquisitions were made in 2023 against 229 acquisitions in 2022.
25% of unicorn founders are seasoned entrepreneurs with prior successes, contributing valuable expertise and experience to their ventures. Bengaluru maintained its status as the foremost unicorn hub in India followed by Delhi and Mumbai, the report stated.
Some key findings of the report are:
- The only two sectors Fintech and e-commerce saw unicorns namely Incred and Zepto.
- There were 123 acquisitions in 2023 compared to 229 in 2022. Olx Autos acquired by Cartrade.com was the largest deal followed by Texts acquired by Automattic
- Zaggle, Mamaearth and IdeaForge are among the eight startup IPOs in 2023
- Edamama, Plix, Olx Autos, Goodera, and Texts were some of the most prominent exits that took place in 2023
- 80% of Indian Unicorns are founded by engineers and 75% of unicorns are founded by first-time founders
- Mensa Brands Took only 6 months to turn Unicorn in Nov 2021 after raising the first $50 million round in May 2021. Five Star Finance is the slowest unicorn so far, taking 37 years to achieve unicorn status. A total of 44 startups became unicorns in less than 5 years.
“Though 2023 saw only 2 Unicorns, we are excited to note how in the last 4 years startups are taking 5 to 6 years to get to Unicorn status vs 8 to 10 prior to that. That shows the market has become large,” Rehan Yar Khan, Managing Partner, Orios Venture Partners commented on the report.
“We also love how many unicorns are profitable and in our conversation with several Unicorn founders, profitability was a big focus area. Both these factors point to there being a significant number of tech IPOs in 2024 and the years to follow,” added Khan.