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A Detailed Look at Unicorns and the Indian Unicorn Ecosystem – Research & Ranking

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  5. A Detailed Look at Unicorns…

Unicorns are mythical beings found in many ancient cultures such as Indian, Chinese and Mesopotamian (ancient Iraq), with different names. A Unicorn is a horse with a horn on its forehead. In ancient cultures, it symbolized purity, rarity, grace and was supposed to be a protector from evil and diseases.

Switch to the modern era, Unicorns are no longer mythical beings but real companies, tangible businesses and concrete ideas, hungry for growth capital. In business parlance, Unicorn is defined as a company with valuation more than $1bn. At current USDINR exchange rate of ~Rs. 73, this works out to Rs. 7,300cr.

The word “Unicorn” was coined by a venture capitalist Aileen Lee in 2013, to describe a very rare breed of companies. Just like Unicorns in mythology, these companies were thought to be extremely rare, almost improbable, but not impossible. When Ms. Lee coined the word, there were less than 40 Unicorns. However, come 2021 and we have a new Unicorn born every three days!

Let\’s take a look at this exciting tribe of companies, which have become very glamorous over the past few years. And proudly, India is among the top countries giving birth to Unicorns consistently year after year. There is a lot that Unicorns have to offer to the economy and the eco-system. We shall take a look at all these aspects one by one.

In this article let’s take a look at different aspects of Unicorns such as:

  1. Introduction to Unicorns:-

We define what are unicorns, which are the major countries/regions where these are setting up. We also look at why unicorns generate so much interest among investors and general public.

  1. The Indian Unicorn eco-system:-

We look at the Indian Unicorn eco-system in numbers. We see how they are classified by – year, sector, city, profession, etc. What value have these companies created for India? Also what support has the Indian Government offered by way of creating a conducive environment?

  1. The Global Unicorn eco-system:-

We look at global Unicorns and divide them by country. USA, China, India and UK are world leaders here. There’s also an interesting breed of unicorns that we take a look at – Global unicorns founded by Indians. Lastly, we look at Government support lent to start-ups in China and USA.

  1. A look at Unicorns in India and globally:-

We take a look at some exciting Unicorns in India and abroad that have introduced newer ways of doing business, addressed a current niche and given existing well-entrenched players a run for their money.

  1. Unicorns – Benefits to the economy and the eco-system:-

Unicorns are not just capital guzzling entities that have been glamorized by the press. They also create real value for investors, eco-system and the economy. From generating employment, to receiving multiple rounds of investments, to creating a ripple effect across sectors; these once-tiny entities are exploding at a breath-taking rate. We look at what the future has in store for Unicorns and whether they can become new avenues for wealth creation going ahead.

While we write tomorrow’s exciting story, we leave you with some quotes from prominent Unicorn founders:

“Being a unicorn means you are at a certain valuation. But a start-up can have value only if it has profits. A Unicorn status in itself is ephemeral”


Yashish Dahiya, Co-Founder and CEO, Policybazaar



“Why would I create something if not to promote it”


Larry Kim, CEO, mobile Monkey



“When I started SpaceX I thought that the most likely outcome was failure. And I think to have any other expectation would have been irrational”


Elon Musk, Founder, CEO and Chief Engineer, SpaceX



\”If we tried to think of a good idea, we wouldn\’t have been able to think of a good idea at all. You just need to have a solution for a problem in your own life.\”


Brian Chesky, Co-Founder & CEO, AirBnB



“I had done 20,000 hours of work in this industry before even starting something. That had given me an edge over those just understand it theoretically”


Nithin Kamath, Founder & CEO, Zerodha

Never stop believing in Unicorns

You never know when you might come across one

As legends have it, Unicorns in mythology possessed magical abilities to cure sickness and were an antidote for poison. Some legends also suggest that Unicorns were used by the ancient wealthy to protect themselves against attacks or extend their lifespan.

Modern day Unicorns might not be able to pull off all this magic, but just like ancient ones, even modern Unicorns are the subject of a lot of curiosity, admiration and intrigue. From less than 40 Unicorns in 2013 to 654 Unicorns globally (as per CB Insights), the animal has evolved a lot!

As seen in the chart below, Unicorns took off after 2018 and the current year (CY2021) has seen 125 Unicorns getting created in five months. The swift emergence of Unicorns has been due to greater smartphone adoption and cheaper cloud computing.

The most popular sectors where Unicorns have come up are:

  • Fintech,
  • E-Commerce and Market-place
  • Artificial Intelligence and Robotics

No. of Unicorns added globally per year have seen a spurt since 2018

Source: CB Insights data as on May, 2021. All year mentioned above are calendar years

USA and China have spawned a disproportionate amount of Unicorns. USA was the dominant place for origination of Unicorns till 2013, while China stepped up on the gas post 2014. UK and India have followed USA and China in terms of number of Unicorns incubated.

USA and China are the major Unicorn destinations, followed by India and UK


Proportion of Unicorns spawned by country since 2010 – 654 in all

Source: CB Insights

Why Unicorns generate so much interest?

Unicorn companies have been the subject of interest for investors, promoters and media for a long time. The term “Unicorn” has become a “cool” word. Every start-up promoter dreams of achieving “Unicorn” status for his/her company few years down the line. The term has become so popular due to the following reasons:


Despite hearing, reading about them all the time, the truth is that Unicorns are a rare breed. According to various studies, only 0.7% – 1.2% of all start-ups have a chance of achieving Unicorn status. That means, for every 1,000 start-ups, only between 7 and 13 will ever achieve the coveted title.

Backing by stalwarts:

Several start-ups are backed by the biggest business personalities or celebrities, from an early stage. The table below shows some examples of start-ups that were backed by famous cricket, Bollywood and business personalities from an early stage. If your favorite actor/cricketer is backing a company, it is sure to generate a lot of interest. Also, if Ratan Tata or Narayana Murthy are backing some start-up, investors and lenders are sure to sit and take notice.



Celebrity Investor

Digit Insurance

Non-Life insurance

Virat Kohli


Digital Ledger App

MS Dhoni


Beauty and Skin Care

Katrina Kaif

Spice Money

Rural FinTech

Spice Money


Online Jewellery Retail

Ratan Tata

Hector Beverages

Non-alcoholic beverages

Narayana Murthy

Explosive growth – Any takers for a 75% CAGR growth?

There was an interesting study done in June, 2020 by Charles Plant of Narwhal Project, a technology research company. In that study, Charles states that a Unicorn grows at a Compounded Annual Growth Rate of 75% for first ten years. The calculation for this metric is as follows:



Unicorn Valuation (by definition) – A

USD 1bn

Median Value of Capital Multiple (Based on research by Narwhal Project) – B


Capital needed to become Unicorn – A / B = C

USD 212mn

Ratio of capital to revenue – D


Revenue scale after ten years – C / D = E

USD 125mn

Resultant CAGR


Note that Capital multiple is the ratio of valuation divided by capital raised. Ratio of capital to revenue (D above) implies the amount of capital raised by companies for every dollar of revenue earned. Based on research by Narwhal, it works out to 1.7xs.

Given the explosive growth start-ups (statistically) exhibit, such companies generate a lot of excitement, interest and media attention.


Disruptive ideas that shake up existing ways of doing business:

Start-ups (potential Unicorns) seek to address a particular need of their target consumers. It makes little sense for a fledgling company to enter an already crowded sector and try to make room for itself. Existing biggies will soon steamroll the company. Hence, newer companies mostly try to address a niche and specialize in it. Sometimes they establish a new way of doing the existing business. Some examples are stated below:



AirBnB / Oyo

A new way of booking hotel rooms

Uber / Ola

Revolutionized shared mobility space without owning any fleet

Zomato / Swiggy

A new way of obtaining hotel food at home

Netflix / Zee5

Offered option of \”on-demand\” content consumption for a fee

Thus, we can proudly say that India is among the major countries where Unicorns are found. Now let\’s examine what India’s Unicorn eco-system looks like. Which sector generates the largest number of Unicorns? Which city can be called India’s “Unicorn factory”? We shall also examine the kind of employment they have created, what valuations they have attracted. And most importantly, what support has Indian Government offered them?

A look at the Indian Unicorn Ecosystem

A proud fact for us Indians is that our country has produced the third largest number of Unicorns after the USA and China.

The Indian Unicorn List

There are different market research companies that put out slightly different data for the number of Unicorns in India. For our story, we have used India-specific data from Venture Intelligence. We have also used data from other sources, which we have mentioned. Take a look at different data points for Unicorns in India.

Following is a list of Top 50 Indian Unicorns as per website Venture Intelligence.

Vauations of Indian Unicorns in Context

According to a report by Credit Suisse, the total valuation of Indian Unicorns is $240bn. At an exchange rate of Rs. 73 per USD, this works out to Rs. 17,520bn. This value is roughly 15% of the Market Cap of NIFTY50 companies and 9% of the Market Cap of NIFTY 500.

Comparative numbers – Unicorn Valuation vs Indian indices Market Cap (Rs. Bn.)

Source: Data for Indian Unicorns as per Credit Suisse Report. (NIFTY 50 and NIFTY 500 MCap data sourced from Moneycontrol website as on closing of 24th May, 2021)

Indian Unicorns by Year

If we look at the year by year emergence of Unicorns, we find that post 2018, the trend has picked up a lot. Despite 2020 and 2021 being COVID-affected years, the trend was up. Some of the reasons for the same are:


  1. Emerging entrepreneurs have leveraged changing consumer behavior, especially in the aftermath of COVID and positioned themselves to serve these needs
  2. Marquee investors (Indian and global) have few places as potentially rewarding as India, given that stock markets are getting choppy and global yields are low.
  3. India offers a potent combination of large addressable market size, technology innovation, ready talent pool at reasonable paychecks, etc.
  4. According to data from Fortune India, 75% of FDI received over the past five years ($184bn out of $250bn) has come in through venture capital and private equity funding, which invests in the unlisted, startup, and growth companies, leading to the creation of unicorns.


According to a report by Nasscom-Zinnov, India is set to achieve 50 unicorns in 2021 and 100 in 2025.

Indian Unicorns by Sector

FinTech and Retail are the two sectors which attract the largest number of start-ups and hence Unicorns. Fintech has seen huge investments due to emphasis of Government on “less-cash” economy and Digitization, boosted by the demonetization drive and pushed further by COVID. Retail, too has aroused interest as entrepreneurs saw an opportunity in delivering essentials, non-essentials and other stuff to customers’ homes in the wake of the pandemic. Even before the pandemic, Millenials had plenty of technology access, sufficient money, but less time and lower propensity to visit shops.

Indian Unicorns by City

Bengaluru is the “Unicorn capital” of India, with a staggering 40% Unicorns originating from the “Tech-City”. This is followed by Gurgaon (14%), Mumbai (14%) and Noida (10%). If we add the three cities comprising of NCR – Gurgaon, Noida and Delhi, the number works out to be 30%, which is ahead of Mumbai.