2024 has been the year of Artificial Intelligence (AI) in the global start-up ecosystem. As many as 110 start-ups achieved the unicorn status this year (valuation over $1 billion) and 40 per cent of these identify themselves as AI companies.
Data from Pitchbook’s unicorn tracker shows that despite liquidity slowing down, more venture-funded start-ups (110) turned unicorn this year, globally, compared to 2023, when 103 unicorns were minted. A bulk of these new unicorns are US companies working on AI and machine-learning technologies. Climate tech, fintech and crypto are the dominant sectors among new unicorns this year.
Krutrim only AI firm from India
However, AI is still not helping mint unicorns in India. Five start-ups turned unicorns here in 2024, as per unicorn tracker Venture Intelligence. Only one – Krutrim – is an AI firm. Rapido, Ather, Perfios and Moneyview are the other unicorns. India’s unicorn tally cuts across electric vehicles, mobility tech, SaaS and fintech sectors. There could be other start-ups that raised funding via secondary rounds but were not tracked through exchange filings.
Unicorns are venture capital-backed private companies valued at more than $1 billion. Venture capitalist Aileen Lee, the founder of Cowboy Ventures, coined the term in 2013 to describe billion-dollar US software companies. At the time, these start-ups were rare, but today billion-dollar start-ups have become fairly common.
Covid curse lifts
India has 110 unicorns so far, of which 60 per cent was minted in the post-Covid global liquidity boom during 2021 and 2022. While the number of unicorns had dipped to just 2 start-ups last year, 2024 has seen a bounce back with VC funding also showing signs of picking up in the recent months. Globally, Pitchbook says there are 1,417 active unicorns as of December 2.
“The investing momentum picked up in India in the second half after a challenging first half,” Rajesh Sawhney, investor and founder of GSF Accelerator, said. “I feel the Indian start-up trajectory is on the upswing and 2025 will see twice as many unicorns as we saw in 2024. However, what we need more (than unicorn tag) is an index on the health of the company, on robust revenue and profit growth,” he said.
As of date, data shows Bengaluru is the unicorn capital with 46 unicorns. Delhi NCR, Noida and Gurugram together house 27 such firms while Mumbai has 21. The southern tech hubs of Chennai and Hyderabad have spawned 5 and 2 unicorns respectively.
Thillai Rajan A, Professor of Finance, Department of Management Studies, IIT Madras, said that while the number of unicorns is influenced by factors such VC investment sizes and the overall start-up creation activity, the spike in numbers generally accompanies emergence of new technologies like what we see today with AI. “However, being a unicorn does not insulate the start-up from business risks,” he added.