India hasn’t produced a single startup unicorn since 2023 started. In September 2022, Goa-based Molbio Diagnostics received funds at a $1.6 billion valuation, becoming India’s last $1 billion business. No Indian company has raised money beyond $1 billion since then.
India produced a record 43 unicorn businesses in 2021 and 22 last year. But, the country hasn’t produced a unicorn this year.
India’s startup downturn coincides with IT industry shrinkage worldwide. Google, Meta, Microsoft, Amazon, and Twitter have laid off tens of thousands of people, while startups like Stripe have drastically cut their valuations. China, the second-largest unicorn producer behind the US, hasn’t generated one in nine months.
India, which has the third-most unicorns, hasn’t created any new unicorns in five months, and its unicorns aren’t doing well either.
Nearly a dozen Indian unicorns removed thousands of workers this year. B2B e-commerce startup Moglix lay off roughly 40 staff in the first week of 2023, followed by Ola, Unacademy, Lead School, and CoinDCX. Soon after, Sharechat fired off 500 people and Rebel Foods, which makes Faasos, Behrouz Biryani, and Ovenstory, laid off 2%. Swiggy lay off 380 workers and Dealshare 100.
Startup cycles often have these figures. Investors finance hundreds of potential startups during cheap interest rates. However, the enthusiasm often leads to unsustainable valuations for many companies that may not be viable enterprises. Investors draw back, chilling the ecosystem, before investing again in a few years. In 2017-18, India saw thousands of layoffs and shutdowns and no unicorns for 18 months. In 2021, the ecosystem rebounded and produced more unicorns than ever before. Indian startups may soon see green shoots after another financing winter.
Conclusion:
No startup unicorn has been formed in India since 2013 began. The country’s startup slump coincides with a global decline in the technology industry, with many tech giants letting go thousands of workers. India’s unicorn population is also struggling, with nearly a dozen Indian unicorns sacking thousands of workers as of 2023. This trend is consistent with the global decline in unicorns, with investors often pulling back on unreasonably high valuations for companies that may not have the capacity to succeed. India experienced a similar decline in 2017-18, with thousands of layoffs and business closures.
However, the ecosystem recovered in 2021, producing more unicorns in a single year than in all preceding years combined. While India may now experience another financing winter, green shoots may return to the startup scene.
