New Indian unicorns will become rarer in 2022 as the funding winter begins


  • While last year 46 companies became unicorns, according to Tracxn’s Geo Annual Report: India Tech 2022the number of companies achieving this coveted status in the startup world dropped to 22 by 2022.
  • Unicorn numbers may have dropped, but gazelle and cheetah numbers — the future unicorns — have risen this year, a Hurun report says.
  • However, India has emerged as the third largest startup ecosystem after the US and China.
  • Industries such as auto, fintech, cleantech, agritech, lifestyle deep tech, artificial intelligence and climate technology are expected to receive higher valuations in 2023.

This year, India has added fewer unicorns to its list as the number of companies winning multibillion-dollar valuations fell by more than half from a year earlier. While last year 46 companies became unicorns, according to Tracxn’s Geo Annual Report: India Tech 2022the number of companies achieving this coveted status in the startup world dropped to 22 by 2022.

India added 20 unicorns worth a total of $26 billion in the first half of 2022, according to the ASK Private Wealth Hurun India Future Unicorn Index 2022 . However, momentum fizzed in the second half when it added just two more unicorns – as the funding winter began.

Since funding is the key to surviving in the startup world, many of them cut back, forcing them to do more with less. According to Traxn Geo Annual Report: India Tech 2022, The financing winter started in the fourth quarter of 2021 and financing has been on a downward trend ever since.

However, the worst effects were felt in the third quarter of 2022. According to the IVCA-EY report, PE/VC investment in India was $8.3 billion in the third quarter 2022down 69% year-over-year.

“Because of rising interest rates and fears of a global recession, investments across all industries have had an impact,” said the Tracxn report, which indicated that the average time it took startups to move from Series A to unicorn round in 2022 was 5, had been 1 year.

As the number of funding rounds dropped by 30% from Jan-Nov 2021 to the same period in 2022, the bigger deals fell even deeper.

The number of companies closing $100 million-plus funding rounds is also down 35% to 55 in 2022, compared to 85 in the same period last year, according to Geo Annual Report: India Tech 2022.

This had a direct effect on the number of unicorns produced. According to the KPMG Venture Pulse Q3 ’22 report, the number of downturns – where money was raised but at lower valuations – will become more common.

“The desire to be called a unicorn is very attractive to startups, but in many cases comes at a cost. We’ll start to see investors look at startups and say, ‘Do you want to be a unicorn? To get that valuation, we want more clout and more favorable liquidation preferences,” said Jules Walker, senior director – business development, KPMG US.

India’s new unicorns in 2022

BusinessIndustryUnicorn event dateFinancing before Unicorn Round
Molbio DiagnosticsHealth TechnologySeptember 2022$124 million
ShipRocketLogisticsTechAugust 2022$336 million
5ireBlockchainJuly 2022$21 million
A mapFintechJuly 2022$126 million
LeadSquaredEnterprise technologyJune 2022$205 million
VioletRetailJune 2022$311 million
PhysicsWallahEdtechJune 2022
OpenDigital bankMay 2022$137 million
Games24x7GamingMarch 2022$32 million
OxyzoFintechMarch 2022
CommerceIQEnterprise technologyMarch 2022$81 million
AmagiCTV advertisingMarch 2022$164 million
YubiAIMarch 2022$90 million
HasuraEnterprise technologyFebruary 2022$37 million
UniphoreAIFebruary 2022$262 million
XpressBeesEcommerceFebruary 2022$181 million
ElasticRunAIFebruary 2022$131 million
LiveSpaceHome decorFebruary 2022$341 million
DealShareEcommerceJan. 2022$192 million
DarwinBoxEnterprise technologyJan. 2022$40 million
LED schoolEdtechJan. 2022$69 million
fractalAIJan. 2022$325 million

Annual Report Tracxn Geo: India Tech 2022

Unicorns in the making: the rise of cheetahs and gazelles

Despite the winter funding, India has become the third largest startup ecosystem, with 69,000 startups and the steady growth of entrepreneurs.

“India has become the third largest startup ecosystem after the US and China and saw a record 44 startups turn into unicorns in 2021. It has the third highest number of unicorns and gazelles in the world,” says Rajesh Saluja, CEO & MD, ASK Wealth Advisors. To be sure, although the Tracxn report estimates 46 unicorns will be made by 2021, ASK Private Wealth Hurun India Future Unicorn Index 2022 report puts this number at 44.

An interesting trend that has emerged is that India has produced more cheetahs and gazelles than unicorns this year. Gazelles are startups that will most likely turn into a unicorn in the next two years; and cheetahs are startups that could turn into a unicorn in the next four years.

India is currently home to 84 unicorns, 51 gazelles and 71 cheetahs, up from 51 unicorns, 32 gazelles and 54 cheetahs in 2021, ASK Private Wealth Hurun India Future Unicorn Index 2022 revealed. 51 gazelles and 71 cheetahs – currently worth $49 billion, up 36% from last year.

According to ASK Private Wealth Hurun India Future Unicorn Index 2022 – with 84 unicorns – India ranks third globally in terms of the number of unicorns in the list. The cumulative wealth contributed by the Indian unicorn and gazelle listers to the IIFL Wealth Hurun India Rich List 2022 increased by 35% to ₹3.14 lakh crore.

Top Investors in Indian Startups in 2022 India

With investments in 39 likely unicorns, Sequoia is the most active investor in the ASK Private Wealth Hurun India Future Unicorn Index 2022. Classplus, DeHaat, Porter, Progcap and CityMall are all funded by Sequoia. It also has two unicorns in its portfolio: Zetwerk and Mamaearth.

Tiger Global, with interests in 27 future unicorns, ranks second on the list of top investors in the same future unicorn index. GreyOrange, Captain Fresh and MoneyView are part of his portfolio.

Sectors expect good valuations in 2023

While enterprise applications, fintech and retail raised the most funds in 2022, in 2023 it will be deep tech and AI that could take over, experts say. “Given the current financing environment where our crystal ball is clouded by soaring inflation, central banks’ tightening fiscal policies make it difficult to predict 2023. However, we believe that industries such as auto, fintech, clean tech, agritech and lifestyle could see higher valuations in 2023,” Pallav Kumar Singh – managing partner of early stage venture capital firm Sphiticap told India.

Industries like EdTech and fast commerce saw their valuations soar in 2021, experts say, but next year will be those of deep tech, agritech, artificial intelligence, clean tech and climate tech.

Investments in sectors that had a tailwind from Covid-led consumer behavior – such as EdTech or work-from-home tools – fell or remained stagnant, while funding for B2B-focused enterprise software and deep tech grew, Vishesh Rajaram, managing partner, Special Invest told India .

“Startups leveraging deep technologies (such as AI, materials physics and chemistry, etc.) see growth capital being pumped in (in addition to early funding). We believe we are at the beginning of the deep tech cycle and expect more funding through 2023,” added Rajaram.

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