There has been a decline in the number of active unicorns in India. The number has come down to 84. Between 2018-2022 the no has come down from 105 to 84. Due to the decrease in investments many startups are losing their unicorn status, according to a report in the Financial Express “founders are avoiding raising funding as the condition of the market is currently unfavorable. Whoever has invested and raised money has faced loses also their Unicorn status”.
Some Companies have been facing losses which in turn led to a major downfall in the investments by investors. These include- Shopclues, Paytm Mall, Quikr, Hike, and Snapdeal which lost their unicorn status. Being part of the Venture Capital sector more than 30 different startups and some with unicorn status such as Vedantu, Unacademy, Ola, Cars24, Innovacer, etc. conducted layoffs this year affecting more than 15000 people.
“Most big startup investors in India are global tech investors and they usually compare some of the domestic Indian startup valuations with tech stocks in the US, Europe, Chinese and Japanese markets. So, they (the global VCs) will mark down Indian holdings if tech stocks fall, which is a trickle-down effect from public to private markets,” said a consultant during an interview with Financial Express.
Softbank which has put in a lot of money in a lot of startups is now starting to feel the effect of losses causing tension between the Indian investors.
Currently, a report by Inc24 suggests that about 9 startups are on the list and their unicorn status could be taken away due to the present exchange rate of the dollar-rupee. Companies that are under the scanner: Oxyzo, Mamaearth, CarDekho, Shiprocket, Grofers, etc.
“Most startups which are currently valued at more than a billion dollars should not be more in that $800 million or so. In the last two years, we were in a very high valuation environment both globally and domestically. And now due to US tech stock correction, some of that will reflect on the Indian companies, and hence, down rounds may happen,” said Pankaj Makkar, MD- Bertelsmann India Investments (BII).
