India as the third largest startup ecosystem in the world, is now home to 67 unicorns, 46 gazelles, and 106 cheetahs as per Hurun India Future Unicorn Index 2024 in association with ASK Private Wealth. The Hurun India 2024 List has included 38 new startup firms in the country. Out of the 38 new entrants, seven are Gazelles and 31 are cheetahs. Gazelles are the companies, that have the potential to become unicorns in the coming three years, while the cheetahs have the potential to become unicorns in the next five years. The list also dropped 25 potential unicorns, 20 cheetahs, and 5 gazelles this year. That said, the list again indicates the strong entrepreneurial growth in the country.
India’s Startup Growth
With more than 112718 startups, which are recognized by DPIIT as of 3 October 2023, India become the third largest start-up ecosystem in the world. When it comes to innovation quality, the country ranks second. The innovation and growth in the nation is not limited to a few sectors, rather it is spreading across all the business sectors in the country. More than 56 sectors have been recognized in which startups are thriving and solving problems.
Between 2015 and 2022, the overall funding to the startups grew by 15 times, while the number of investors increased by 9 times. That said, the funding was affected adversely in 2022-2023 however, it has again picked up.
Factors affecting the startup ecosystem
The startup ecosystem is highly dependent on –
- Funding: As mentioned above, the funding has grown multiform since 2015, however, in the past 2-3 years, it slowed down which affected the startups and their growth.
- Valuations: The startup valuation stood inflated before 2021, which also adversely affected the whole ecosystem, and this is one of the primary reasons for 25 unicorns in India being dropped from the list of 2024.
- Faulty companies: Companies like Byjus and similar startups, which failed miserably negatively, affected the whole setup, and made investors afraid of the startup investment.
Turnaround in the Startup Ecosystem
All these factors, mentioned above have helped in bettering the startup industry and made 2024 a turning point. The unicorn index 2024 has significant growth compared to the previous year. Ixigo, which is one of India’s popular travel companies, has played a pivotal role in this turnaround. With its IPO recently which was at 48% premium, this former cheetah made the startups look promising again. The online travel company bypassed the Gazelle status while it was supposed to become a unicorn by 2027, it already become a public entity with a market capitalisation of ₹ 6000 crores.
Startups, that become unicorn startups in India this year include Zepto, Incred Finance, and Porter. In addition, 10 companies gained gazelle status from their former cheetah status as per Hurun India 2024 list.
The reasons behind the turnaround in the startup ecosystem also include the rising focus on the profitability of the startups, sustainable business models, and employment generation potential. As per the Hurun India report, the start-ups, which are potential unicorns, employ around 1.5 lakh people in the country.
Most Promising Sectors
Hurun India Index 2024 features one Gazelle and two cheetahs from the space tech sector. In the AI industry, there are five gazelles and six cheetahs while the renewable energy sector and the EV sector have added one gazelle and five cheetahs to the list.
Apart from these three sectors, Agnikul Cosmos from the aerospace technology industry also emerged as a promising gazelle with its 3D-printed rocket launch. This sector also looks promising with the increasing demand for bigger aircraft, a growing number of passengers, and a significant rise in defense expenditures by the government.
While these are the rising sectors in the startup ecosystem, the sectors, that are mostly disrupted by the startups, are financial services, education, business management, and healthcare.
Another interesting fact about these sectors’ potential unicorns is that 12 of the gazelles and cheetahs from these above sectors did not even exist before 2020.
Significant Investors
The Hurun India Future Unicorn Index 2024 also listed the top investors in the startup arena. Peak XV Partners has investments in 47 startups and it is at the top of the investors list now. Then there is Anand Chandrashekharan who has investments in more than 20 future unicorns. Then there is Kunal Bahl with a portfolio of 11 investments in startups and then there is Kunal Shah who has nine future unicorns in his portfolio.
Final Thoughts
While some of the massive startup failures like Byju’s affected the golden era of startups in the past year, however, the turnaround has been solid and now both the businesses and the investors are more aware which is a boon for the ecosystem in the long run.
Source:- https://www.cnbctv18.com/, https://investindia.gov.in/
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