India's Unicorn Boom

It has been a rich period for India’s start-up ecosystem, with as many as 48 newborn businesses riding the new digital wave to command valuations of $1 billion or more. Can they live up to their early promise and create sustainably profitable businesses?

- M.G. Arun And Shwweta Punj

Ancient Indian legends talk of a nimble, fleet-footed mythological horse-like creature called the ekashringa, or unicorn, taking its name from the single horn on its forehead. The horn, if you drank from it, was said to have magical healing properties. Meanwhile, in the jungle that is today’s business environment, unicorns—defined as technology-driven, disruptive, privately-owned start-up companies valued at over $1 billion (Rs 7,430 crore)—have shown a rare immunity against the waves of the Covid-19 pandemic that have brought most other businesses down to their knees. In 2021, amidst a debilitating Second Wave, India acquired 11 new unicorns, taking the total to 48, the third-largest number in the world, after the US and China.

Leading the pack is Byju’s, a Bengaluru-based ed-tech firm founded by Byju Raveendran, 40, and Divya Gokulnath, 34, in 2011. A completely offline model till about six years ago, Byju’s is now a fully online education company with over 100 million users in India. In June this year, at the peak of the pandemic, its valuation jumped to $16.5 billion (Rs 1.2 lakh crore) after the world’s top investors poured in big funds, making it India’s most valuable unicorn. It is, in fact, what in industry parlance is called a decacorn (commanding a $10 billion or Rs 74,280 crore valuation or more) and is the world’s 11th most valued start-up.