Twenty-three privately-held startups in India surpassed the $1 billion valuation mark in 2022, just around half of the previous year’s 45, show data from DealStreetAsia DATA VANTAGE‘s India Deal Review: Q4 2022 report.
The new unicorns of 2022 had a combined valuation of $38.7 billion when they entered the coveted club.
In comparison, the unicorns of 2021 were cumulatively valued 150% higher at $97.35 billion when they attained the 10-digit dollar valuation.
The fall in the number of new unicorns minted last year was in line with the overall slowdown in startup fundraising in India. Startups in the country amassed only $26.5 billion in the entire 2022, down sharply (-42%) from the $46 billion raised in 2021 when plush global liquidity had led to a funding frenzy, according to the report.
Startup fundraising in 2022 was still higher in comparison to the $11.6 billion raised in 2020.
“Venture inflation has cooled far quicker than traditional inflation, and investors will become more judicious of higher valuations in the near future. Value creation will move more closely with valuations, going forward. The number of unicorns may shrink due to downrounds, distress M&As, and closures,” Siddarth Pai, Founding Partner, 3one4 Capital, had told DealStreetAsia in November last year.
“But the outlook should improve from mid-2023 as these factors get priced in by investors and confidence comes back into the market,” Pai added.
Average age of new unicorns
The average time needed to attain unicorn valuation also increased in 2022. The average age of startups that became unicorns stood at 8.91 years last year, up from 7.11 years in 2021 and 8.75 years in 2020.
The oldest among 2022’s new unicorns were Molbio Diagnostics and Fractal Analytics, both of which were founded in 2000. AI startup Fractal became a unicorn after raising $360 million from TPG in January, while Molbio Diagnostics, known for its COVID-19 detection tests, raised $85 million from Temasek at a unicorn valuation.
The youngest of 2022’s unicorns was 5ire. Founded in 2021, the blockchain startup raised $100 million in a Series C round in July last year.
In 2021, meanwhile, two of the startups that entered the unicorn club — GlobalBees and Mensa Brands — were founded that same year.
Unicorns by sector
In 2022, the financial services industry and the software industry produced the most unicorns — five each.
The most valuable unicorn of the year was also from financial services. Polygon was valued at $10 billion when it raised $450 million in February from Sequoia Capital India.
In 2021, too, financial services had produced the most unicorns (11), followed by retail (5) and software (4).
Unicorns that went public
So far, 14 unicorns (minted in any period) have listed on the stock exchanges locally or overseas, according to The India Tech Unicorns & Exits Report: 2022 released by Orios Venture Partners.
“We will see at least half a dozen tech IPOs coming up in 2023, partly because people will be able to understand investor sentiments and manage them better, and also because enough companies are at that point in their journey where the next logical step is to tap the public markets,” said Ashish Fafadia, Partner, Blume Ventures, for the DATA VANTAGE report
Unicorns founded by women
India is home to over 100 unicorns today, but only 18 of them have at least one female founder or co-founder, according to Orios Venture Partners.
Female founders of Indian unicorn startups
