India’s startup ecosystem is now 100 unicorns-strong, and they are collectively transforming the corporate landscape of the country at a rapid pace!
A recent report by Credit Suisse reported how innovation taking place in various sectors in India has resulted in the growing number of highly valued private companies called unicorns. Interestingly, the report highlights that the combined market capitalization of these unicorns exceeds a whopping $240 billion.
Now, while the conventional list of Indian unicorns reveals only 37 as of December 2020, the investment banking group went on to find many more after it rigorously investigated around the same.
Credit Suisse’s India Market Strategy said that the existence of these many unicorns in the country can be majorly attributed to the lightning-fast pace at which new companies have been forming in varied sectors in India besides innovation.
In its report, Credit Suisse found that the sectors wherein the 100 Indian unicorns operate are highly diversified in addition to the majority of them belonging from fields such as e-commerce, fintech or financial technology, food delivery, edtech or education technology and mobility.
Furthermore, the report also highlighted that number of emerging Indian firms are from industries such as SaaS or software-as-a-service, new-age distribution, gaming, biotech, pharmaceuticals, logistics and more. Several fast-growing consumer-facing brands have also largely benefitted from the accelerated penetration of internet usage and the formalization of previously unorganized sectors.
Note here that besides the market cap of private companies in the ‘$1 billion club’, Credit Sussie’s report also mentioned that the market capitalisation of the listed equities has risen too, making India 8th largest market worldwide. This has led to the Indian startup ecosystem, at combined valuation of $90 billion, being the abode for the third largest set of unicorns, coming behind the U.S. and China across the entire world.
Now when it comes to the industries which are leading the Indian unicorn landscape, fintech, including e-commerce, makes up 30% of the entire pie with five unicorns that have an aggregate valuation of a whopping $22 billion, which is the highest amid all Indian unicorns.
The report also reveals that the digital payments space in India is continually growing at a rapid speed, with over 200 million active users and 30 million merchants who accept online payments when compared to 5 million traditional PoS aka point-of-sale terminals. What more?
Credit Suisse’s report further highlights that the Fintech sector in India is the second-largest recipient of venture capital/private equity funding over the last ten years, with payments helping the title of being the leading sub-segment which raised $4.2 billion followed by $2.5 billion raised by digital lending firms.
At present, even though digital payments have picked up pace in terms of adoption, all thanks to the pandemic, Indian fintech companies are actively looking to expand into other segments being their core offerings for diversification and increasing monetization.
As for digital lenders, they have grown to $10 billion by grabbing a 40% share in personal and consumer durable related loans and are currently adding more new loan products as their underwriting models keep performing better.
Lastly, in India, the fintech space has also been able to forge several partnerships with banking institutions in order to introduce products in the credit, investment and insurance categories. This move has led to the opening of new channels of growth and revenue and has also contributed heavily to the increase of user engagement as well.
It now remains to be seen how will the next decade pan out for the country’s startup community. We will keep you updated. Until then, stay tuned.