When a private company is valued at or over $1 billion, it is referred to as a unicorn startup; because just like the mythical creatures, getting a billion-dollar valuation is improbable.
In the past few years, we are seeing an elite group of startups successfully managing to navigate the challenges of becoming a unicorn. Today, we are living in a world of unicorns as venture-backed companies are scaling up and transforming the markets.
Despite the onset of the pandemic and the economic slowdown, the Indian startup ecosystem is growing and strengthening the economy. With the birth of 44 unicorns in 2021, India is becoming the third most preferred destination in terms of capital investments.
Across the world, in five and a half years, the number of unicorns grew from 165 to 743, depicting the amount of capital flowing into unicorns with the surge in fintech investments.
The following trends represent the potential opportunities and are expected to shape the industry in the next few years.
We are seeing a rapid growth of platform economy and e-commerce, which has created a digital payment phenomenon. Digitization of the economy is accounting for consumer app platforms to broaden payment services to lending through ‘buy now, pay later’ options, mortgages, wealth management, and insurance.
With a CAGR of 35%, fintech unicorns have grown four times from 36 in 2016 to 159 in 2021.
Digital currencies are expected to go mainstream, as their foundation and infrastructure stabilise for future innovation.
Growing to meet the demands of the market, electric vehicle sales are expected to grow at a CAGR of 24.3% in the 2021-2028 period. Accommodating this rise, global automakers are committing to an electric transition or electric models, which is why unicorns are rapidly expanding into this market or are becoming unicorns of component
providers, like scaling AI engines and sensors.
Across the world, the digital natives i.e. Gen Z, are coping with the pandemic by living a part of their lives virtually. This transition has brought a tech-enabled digital world, the metaverse, to life, therefore creating a demand related to edtech, streaming, and gaming. It is these markets that will be seeing a growth in unicorns. Over the decade, the union of crypto, 5G, and metaverse has the potential to create a web 3.0 economy.
Technology is guiding so many verticals and helping investments and business processes to evolve. There is a rising diversification of startups, and with the crackdown on China’s tech companies, India has become an attractive alternate emerging market With a bevy of IPOs launched and a few more in the pipeline, opportunities abound for investors to participate in wealth creation. Getting your foot in the door of a profitable business, IPOs provide you with an opening for long term investment opportunities to enjoy steady growth over a period of time.
Located in domestic market-oriented services like finance, technology, consumer, hospitality and retail, the growth pivot in time is going to be exponential. With the likes of Swiggy, Zomato, Nyka, and Paytm, joining the Unicorn club in India, we can expect an increase in employment generation as well. Deep tech and IT driven ideas that have been brought to the financial sector will aid the fintech industry to dominate the Unicorn club. The facilitators of the rise of this club are an increase in internet penetration, a surge of skilled talent, availability of private equity, digital payments and robust infrastructure. Changes in reforms and policies have also aided this growth.
How to approach an IPO
To successfully transform a private entity into a listed company requires a shift in focus. One needs to have a structured and a holistic approach to process managed transformation of the culture of an organisation. It is a coordinated team effort, where assembling an advisory team well before the public launch is imperative. While going for an IPO, companies need to consider regulatory framework and compliance requirements to be better prepared.
IPO Highlights from Q2 2021 (Source EY.com)
Indian markets continue to reach new heights and we can hope for this strong momentum to continue this year as well. Mentioned below are the list of upcoming IPOs. (Source: AngelOne.in)
| Name Of The Company | IPO Date (Tentative) |
| LIC | 11 March 2022 |
| Go Airlines | 2022 |
| Arohan Financial | 2022 |
| MobiKwik | 2022 |
| Utkarsh Small Finance Bank | 2022 |
| Ixigo | 2022 |
| Penna Cement | 2022 |
| Keventer Agro | 2022 |
| Paradeep Phosphates | 2022 |
| Sterlite Power | 2022 |
| Fincare Small Finance Bank | 2022 |
| Seven Island Shippings | 2022 |
| PharmEasy | 2022 |
| SAMHI Hotels | 2022 |
| Bajaj Energy | 2022 |
| Apeejay Surrendra Park Hotel | 2022 |
| Gemini Edibles And Fats | 2022 |
| ESAF Small Finance Bank | 2022 |
| Medi Assist Insurance TPA Pvt. Ltd. | 2022 |
| Inspira Enterprise India Ltd. | 2022 |
| Muthoot Microfin | 2022 |
| Fusion Microfinance | 2022 |
| Chemspecs Chemical | 2022 |
| Shri Bajrang Power And Ispat Ltd | 2022 |
| Hinduja Leyland Finance | 2022 |
| VLCC Healthcare | 2022 |
| Studds Accessories | 2022 |
| Harsha Engineers | 2022 |
| ESDS Software Solutions Limited | 2022 |
| Annai Infra Developers | 2022 |
| Popular Vehicles And Services | 2022 |
| Narmada Bio-Chem | 2022 |
| Prudent Corporate Advisory Services | 2022 |
| Tamilnad Mercantile Bank | 2022 |
| Tracxn Tech | 2022 |
| HDB Financial | 2022 |
| Century Metal Recycling | 2022 |
| Aakash Educations | 2022 |
| OYO Rooms | 2022 |
| Droom | 2022 |
| Delhivery | 2022 |
| Ecom Express | 2022 |
| Navi | 2022 |
| Snapdeal | 2022 |
| Capillary Technologies | 2022 |
| Ola | 2022 |
| BYJU’s | 2022 |
| Swiggy | 2022 |
| *The Issue Size And Issue Dates Will Vary. |
The Takeaway
Redefining the industries in which these unicorns run is reshaping capital markets and investment strategies. With globalisation, expansion into new geographic markets, the development of new products and services, there are plenty of opportunities for unicorns to thrive. We are moving towards a digital economy where with innovation, companies can realise their unicorn dreams
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