Startups that became unicorns in 2024 took an average of nine years and six months to reach $1 billion valuation, reflecting the impact of a prolonged funding squeeze from PE/VC firms over the past few years.
Startups in India that became unicorns in 2019 took over 10 years on average to reach the milestone of a $1 billion valuation.
But just four years later, in 2023, the average time to achieve the same status was cut in half to just five years, as private equity and venture capital (PE/VC) firms poured cash into these companies to scale their businesses without focusing much on profitability, according to data from research agency Tracxn.
But that is not the whole story.
Startups that became unicorns in 2024 took an average of nine years and six months to reach $1 billion valuation, reflecting the impact of a prolonged funding squeeze from the same PE/VC firms over the past few years.
This effectively reset the timeline to 2019 levels.
In the US, by contrast, a study by the Stanford Graduate School of Business found that startups after 2014 reached unicorn status in 3.4 years, compared to 6.6 years before that.
Yet, the startup world has been a study in contrasts.
On one hand, many startups hit unicorn status even before they started selling their products or just shortly after.
The standout example was Bhavish Aggarwal, who saw two of his three startups -- artificial intelligence (AI) company Ola Krutrim and Ola Electric -- become unicorns within one year and two years of incorporation, respectively, thanks to funding from SoftBank.
He was not the only one.
Between 2019 and 2024, startups like Yubi (an online business loan platform), Physics Wallah (providing online classes for Joint Entrance Examination and National Eligibility-cum-Entrance Test students), Mensa Brands and GlobalBees (online platforms acquiring ecommerce brands), and Glance (a mobile lockscreen content provider) became unicorns within one to two years of incorporation.
The year 2021 was a big one for startups that are now key names in the unicorn club, including Cred, CoinDCX, Zetwerk, BharatPe, and Mobile Premier League, all of which reached the milestone in three years.
However, not everyone scaled at the same pace.
For some, it was a long journey that involved changing business models.
Zoho, a business software suite, began in 1996 as a network management software company but rebranded in 2009 to focus solely online.
It took Zoho 23 years to achieve unicorn status in 2019.
Other long-haul journeys include Pine Labs (which provides payment solutions to businesses), Molbio Diagnostics (a provider of molecular diagnostic tests for infectious diseases), and Fractal Analytics (an AI-powered data analytics company), all of which took 22 years to achieve unicorn status Pine Labs in 2020 and Fractal Analytics and Molbio Diagnostics in 2022.
Even the popular gaming app Games24x7 took 16 years to join the exclusive club.
Feature Presentation: Ashish Narsale/Rediff.com
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