The Secret of The Unicorn

If you're looking for real unicorn companies, look within listed stocks rather than the so-called startups

- DHIRENDRA KUMAR

Recently, I came across a YouTube video (https://bit.ly/inv-india) that you should all watch. It was a short speech by Deepak Bagla, the head of Invest India, the country's investment promotion and facilitation agency. In just about 15 minutes, Mr Bagla put into perspective the incredible pace and scale at which some truly significant things are happening in our country. In fact, our team picked inspiration from his great talk for the cover story of the last issue of our other magazine, Mutual Fund Insight.

However, the small part of the talk I felt some dissonance with was his pride in India's enormous production of 'unicorns'. If you look in the dictionary, a unicorn is defined as an animal that only exists in stories, that looks like a white horse with one horn growing out of its forehead'. Something that exists only in stories is an oddly appropriate term for startups that claim to have a valuation of more than a billion US dollars.

Once upon a time, articles in serious business publications would always mention the revenue and profits of companies they were writing about. It helped readers get an immediate sense of the scale and the business's success. Now, readers are often expected to get by with just the valuation. And what is this valuation? At best, it will be the total valuation at which the company last raised money. More often, it will be something even worse the total valuation at which the company is trying to raise money.