More start-ups to turn Unicorns in 2021

Sangeetha Chengappa Bengaluru | Updated on April 24, 2021

Unicorns are privately held start-ups with market value of over $1 billion   -  Getty Images/iStockphoto

35 ‘Soonicorns’ are ready to move into the big league

The next few months will see 35 ‘Soonicorns’ join the Unicorn league of tech start-ups. Soonicorns are start-ups that have high growth potential and high probability of joining the Unicorn club.

It has been an incredible start to 2021 for the Indian tech start-up ecosystem with Bengaluru-based general insurer Digit Insurance, debuting as India’s first Unicorn in January following a $18.4-million fund-raise.

Since then, the country has witnessed the making of 10 more start-up Unicorns — Innovaccer, Infra.Market, Five-Star Business Finance Ltd, Meesho, CRED, Mohalla Tech, PharmEasy, Groww, Gupshup and Chargebee. Unicorns are privately held start-ups with market value of over $1 billion.

Queuing up

A list of India’s Soonicorns by PGA Labs, the market intelligence business unit of Praxis Global Alliance, a global management consulting and advisory firm, features tech start-ups across fintech, edtech, healthtech, foodtech, agritech, SaaS, logistics, digital gaming and e-grocery, with valuations starting from $200 million to $904 million. Some of them are Practo, BharatPe, Eruditus, Rebel Foods,, Grofers, Vedantu, Open, Ninjacart, Mswipe, Acko, MobiKwik, Capital Float, MPL, Rupeek, Licious, FreshToHome, Khatabook, Lendingkart, BankBazaar, Dunzo, 1mg, Shadowfax, Ecom Express and Navi.

“Our Soonicorn list includes those tech start-ups who we believe will enter the Unicorn club within a year to 18 months. Our view is that these start-ups led by fintech, cloud kitchen and SaaS start-ups will most likely become Unicorns with their next round of funding based on their business potential and business momentum. Some of these companies are in reasonably advanced stages of their next fund raise and you will see at least 5-6 Unicorns emerging in the next two months,” Madhur Singhal, Managing Partner and Practice Leader – Technology and Internet, Praxis Global Alliance, told BusinessLine.

Of the firm’s first list of Soonicorns released in December 2020, which had a list of 34 tech start-ups, four —Digit Insurance, CRED, Innovaccer and PharmEasy — have made it to the Unicorn club in 2021.

‘Time is ripe’

Sanjay Swamy, Managing Partner at Prime Venture Partners, which has 12 fintech start-ups in its portfolio of 30, feels there has been a massive build up over a decade to 2021, a year which produced 11 unicorns in the first four months. “The time is ripe for fintech start-ups to enter the Unicorn club. This is because, digitisation is happening at all levels. It started with infrastructure building with the introduction of Aadhaar, e-KYC and UPI. Then demonetisation brought in mass awareness about an alternative to cash and some early adopters stuck to it. Then the smartphone/4G explosion which empowered people to shop, eat, consult online. But what compelled people to go cashless and adopt digital payments was the outbreak of Covid.”

The country produced 14 Unicorns in 2020 and 10 Unicorns in 2019 per data from PGA Labs. “This is a remarkable year for tech start-ups but it is just the start. This year we produced 11 Unicorns in 4 months. Two years from now, we will produce 11 Unicorns in a month” said Swamy.

Food industry

K Ganesh, serial entrepreneur and partner GrowthStory, which has four foodtech start-ups in its portfolio of 12, says the reluctance of people to huddle together and eat in closed spaces like restaurants, lounges and bars due to the pandemic has opened up the online food industry like never before. In this space, we have already seen aggregators like Zomato and Swiggy zooming in valuations. On the flip side, B2B foodtech start-ups that are dependent on offices being opened have taken a massive hit due to the shutdown. D2C cloud kitchen brands will see a huge uptick and this is just the beginning. Those who execute well will see tremendous growth not just in metros but in Tier -2,-3 cities.

Published on April 23, 2021

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