The funding winter has knocked out 19 start-ups from ASK Private Wealth Hurun India Future Unicorn Index 2023 even as the funding into 230 start-up constituents of the index increased 6 per cent to $18.8 billion as of May-end.

Hurun Research Institute has classified start-ups as Unicorns (valuation of $1 billion), Gazelles (valuation of $500 million and to become Unicorn in three years), and Cheetahs (valuation of $250 million and to become Unicorn in 5 years).

The number of Unicorns in the ASK Private Wealth Hurun India Future Unicorn Index 2023 has dropped marginally to 83 from 84 while Gazelles remained stable at 51 but Cheetahs increased to 96 from 71.

Indicating a slowdown in the Indian start-up ecosystem, there were only 3 start-ups that turned into Unicorns this year against 24 logged last year. Moreover, 8 Gazelles were demoted to Cheetahs.

The value of future Unicorns increased 16 per cent to $57 billion. Consumer electronics start-up Boat jumped a stage to enter the Unicorn club from Cheetah.

EV start-up Ather Energy, quick commerce firm Zepto, and Edtech Leap Scholar are the most valuable Gazelles, while online furniture platform Pepperfry was a valuable Cheetah.

E-commerce, fintech, and SAAS comprise 42 per cent of the Future Unicorn Index, while financial services, healthcare, business management solutions, logistics, and retail are the sectors that were disrupted the most this year.

Rajesh Saluja, Managing Director, ASK Private Wealth said, despite the headwinds, the start-up founders have demonstrated unwavering determination, adaptability, and resourcefulness. The funding winter serves as a catalyst for innovation, urging start-ups to think creatively, optimise resources, and refine their strategies.

Anas Rahman Junaid, Founder and Chief Researcher, Hurun India, said the Gazelles and Cheetahs provide an insight into the economy of tomorrow as what they are doing and where they are doing it gives an indication into which sectors are attracting the top young talent and smartest capital.

While rising interest rates and global uncertainties have dramatically reduced the appetite of investors to put money into start-ups in the past half year, there are nonetheless 147 companies, a new record, that Hurun Research believes, are most likely to ‘go Unicorn’ in five years, he said.

The slowdown in the economy has been tough for certain companies, with almost 20 per cent of last year’s Gazelles and Cheetahs either dropping off the list or being downgraded as these companies can no longer become Unicorns in three years. Rising interest rates and geo-political headwinds have combined to make it harder for start-ups to raise capital, said Junaid.