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After the United States and China, India boosts the world’s third-largest startup ecosystem. As of 2021-22, the number of newly recognised startups has risen to over 14000 from just 733 in 2016-17, with 44 Indian startups becoming unicorns. In the last two years, the number of unicorns in India has grown tremendously. There were 17 unicorns in 2018, 38 in 2020, and 71 in 2021, with more on the way. As a result, the valuations of several of these unicorns, which have garnered more than $9 billion so far, have also increased. The Economic Survey 2021-22 also included this information. Indian unicorns include Lenskart, Cred, Meesho, PharmEasy, Licious, Grofers, etc.
Let’s Understand the Indian Startups
The Indian startup community has more than 100,000 members. It is a startup ecosystem that brings together entrepreneurs, investors, and partners from all across India and the world to assist in developing, growing and empowering new businesses.
Our community members can connect with other co-founders, members of startup teams, mentors, advisers, incubation facilities, co-working spaces, seed fundraising and crowdfunding agencies, high-net-worth individuals, and other startup requirements.
The mission of Indian startups is to reduce the financial and logistical barriers that prevent potential business owners from starting their own companies, regardless of their current financial situation or location. Their goal is to assist new businesses in secluded towns and cities, where few other organisations have dared to go and offer their services.
The Indian startup network is looking to form partnerships with other organisations poised to play an important part in developing India’s entrepreneurial ecosystems. Indian startups, together with their partners, think that new businesses have the potential to stimulate real economic growth throughout the nation and act as a platform to facilitate this growth.
Unicorns in India
Unicorns in India are startup companies that are privately held, are supported by venture capital, and have reached a valuation of one billion dollars. The valuation of unicorns is not directly proportional to their current levels of financial success. Rather, it is predominately predicated on the growth potential that investors and venture capitalists who have participated in various investment rounds believe the unicorn to possess. Aileen Lee, an American venture capitalist, is credited with having coined the term in 2013. This was done to emphasise how rare it is for businesses of this nature to get their start. In an article titled “Welcome to the Unicorn Club: Learning from Billion-Dollar Startups,” which was written by Lee for Techcrunch, the author sought to answer the question, “How likely is it for a startup to achieve a billion-dollar valuation?” by analysing US-based technology companies that had been founded after January 2003.
What Is Startup Funding?
When an investor contributes money to a firm, they essentially purchase a stake in that business. They provide financial backing in exchange for equity, which entitles them to a share of the company’s ownership and a piece of any potential future earnings the business may generate. Investors form a partnership with the startups in which they choose to invest. If the company generates a profit, investors receive returns proportional to the equity they hold in the Indian startups. However, if the startup is unsuccessful, investors lose the money they have invested.
Through various exit strategies, investors can obtain a good ROI on their startup money. In a perfect world, the venture capital firm and the entrepreneur would start the investment negotiations by discussing the numerous choices for exiting the company. The likelihood of a firm being ready for an exit earlier than other startups is increased if the startup is high-performing and high-growth and if it also has good management and organisational processes. Funds that are in private equity and venture capital must sell all of their holdings before the conclusion of the startup funding life cycle.
Conclusion
The achievement of a one billion dollar valuation continues to garner attention from the business world. It is seen as a remarkable feat, even though it has become increasingly frequent for businesses to earn the “unicorn” label since it was first used. PitchBook, a company that provides financial data and analytics, asserts that a convergence of private and market investment makes it possible for more unicorns to emerge and do so at a faster rate. The process can be difficult even if you’re looking to secure startup finance from a traditional lender. High sales volume, cash reserves, a year of business history, and solid credit are typically required by banks to lend money to small businesses.
