Indian unicorns, or startups with a valuation of at least $1 billion, are defying the conventional logic of valuations being based on future earnings. As their losses widen, private investors are rewarding them with even higher valuations.
In fiscal 2016, for instance, when Paytm parent One97 Communications Ltd posted a loss of ₹1,497 crore, it was valued at ₹30,747 crore or about $5 billion. Three years later, its losses have nearly tripled, with a consolidated loss of₹4,217.20 crore for the year ended 31 March. In the same period, the Noida-based firm’s valuation tripled to $15 billion.