Unicorn Companies

India’s 136-strong unicorn founders club has only five women in it and as of August 4, the country had 56 start-ups that had turned unicorns.

  • More Details:

 A gender analysis brought out a poorly skewed scenario as 131 of the 136 unicorn founders in the country are males and only five are women: Divya Gokulnath (Byju’s), Falguni Nayar (Nykaa), Ruchi Kalra (OfBusiness), Saritha Katikaneni (Zenoti) and Gazal Kalra (Rivigo), as per EMA Partners, a global executive search and leadership advisory.

The study also found it took seven years, on a median basis, for 56 start-ups to achieve unicorn status. Four of them turned unicorns in 1-2 years of operation, 15 of them in 3-5 years, 19 in 6-8 years, 12 in 9-12 years and the remaining took 13-plus years to get their valuation to $1 billion.

Examples of Indian Unicorn companies: Flipkart, Snapdeal, FirstCry, Moglix, Infra. Market, Udaan, Paytm Mall, Droom, Paytm, PhonePe, Zerodha, Razorpay, Pine Labs and others.

  • What is a Unicorn?

 "Unicorn" is a term used in the venture capital industry to describe a privately held startup company with a value of over $1 billion. The term was first popularized by venture capitalist Aileen Lee, founder of Cowboy Ventures, a seed-stage venture capital fund based in Palo Alto, California.

Aileen Lee first wrote about unicorns in the venture capital world in her article, "Welcome to the Unicorn Club: Learning from Billion-Dollar Startups." Here, she looked at software startups founded in the 2000s and estimated that only 0.07% of them ever reach a $1 billion valuations. Startups that managed to reach the $1 billion mark, she noted, are so rare that finding one is as difficult as finding a mythical unicorn.

According to Lee, the first unicorns were founded in the 1990s. Alphabet (GOOG)—then Google—she noted, was the clear super-unicorn of the group with a valuation of more than $100 billion. Many unicorns were born in the 2000s, though Facebook (FB) is the decade's only super-unicorn. 

  • Valuation of Unicorn:

The value of unicorns is generally based on how investors and venture capitalists feel they will grow and develop, so it all comes down to longer-term forecasting. This means their valuations have nothing to do with the way they perform financially. In fact, many of these companies rarely generate any profits when they first get running.

  • Latest Entrant to Unicorn Group:

Online upskilling platform for professionals, Eruditus has raised $650 million in fresh funding led by Accel and SoftBank Vision Fund 2 at a post-money valuation of $3.2 billion, joining the ranks of unicorn.