E-commerce makes way for other sectors in Indian unicorn list

The pecking order of unicorns, start-ups that are valued at $1 billion and above, is changing rapidly with online retailers making way for start-ups in other sectors, even as they achieve unicorn status in record time. Year to date, five new companies have entered India’s unicorn club—Swiggy, PolicyBazaar, Freshdesk, Udaan and Oyo. Except PolicyBazaar and Freshdesk, all the others were founded after 2014. Udaan, a marketplace for businesses, was launched in late 2016, taking less than two years to become a unicorn.

Earlier this year, the largest Indian internet start-up, Flipkart, was acquired by Walmart. Currently, Paytm is India’s most valuable start-up, valued at $10-12 billion.

The introduction of 4G services by Reliance Jio Infocomm Ltd in 2016 led to an explosion of mobile connectivity with greater speed and consistency, opening up a larger market of consumers for internet start-ups.

“The reason why start-ups are taking less time to scale up is because we now have a much larger market than we did four years ago—from 200 million internet users in 2014, we now have nearly 500 million users,” said Ritesh Banglani, partner at Stellaris Venture Partners. “In that period, there has also been an evolution of internet users and the group of users who started using the internet back in 2014-15 are now more regular transacting consumers, who order a complex variety of products and services online. Ten years ago, we barely had a couple of companies that had a user base of more than 1 million. Now, there are more than a dozen such companies,” he said.

Banglani expects companies to grow faster. Apart from the accelerated speed of growth, new entrants to the unicorn club show that business models other than e-commerce are finding favour with investors.

Only one out of the five— Udaan—is a commerce platform. Earlier, the unicorn club was dominated by e-commerce firms such as Flipkart, Snapdeal and ShopClues. Now, as the internet boom goes mainstream, sectors such as food and groceries delivery, financial technology and content are attracting massive amounts of capital. Several other start-ups such as BigBasket, ShareChat, BookMyShow and Rivigo might become unicorns over the next few quarters, investors said. This follows a dry spell of two years that began in early 2016, during which only two start-ups entered the unicorn club.

“Unlike 2014-15, when e-commerce was the hottest sector, the market is much more broad-based now,” said Anand Lunia, founder of early stage investment fund India Quotient. “What we’re seeing is a maturity of internet consumers and, more importantly, the kind of transactions that are taking place now. They’ve moved on from the days of heavily discounted e-commerce to other platforms where they are spending significantly, without being incentivized by crazy discounts. So, the order has changed because of this consumer maturity.”

Also Read:

India: Udaan enters unicorn club with $225m funding from Yuri Milner’s DST, Lightspeed

As more consumers get online, SE Asia will mint new unicorns: Jenny Lee, GGV Capita

Indonesia’s unicorns eye a bigger splash in fast-growing fintech market

This article was first published on livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.