The optimist view on the pandemic
Despite of pandemic causing a havoc in business and startup world. When the world was grappling amidst crisis, the pandemic has opened new doors for startups to emerge.
It is an undoubted fact that the year 2020 has been worse of worst years. Be it people, businesses, startups, markets, or investors, the pandemic has affected them all. The pandemic, the subsequent lockdowns, and the economic depression have left people amidst struggle to survive, to fulfill their needs. The startups too faced the impact, some fought like fierce warriors, others lost their battles. Everyone is ready to bid 2020 goodbye on a somber note and welcome 2021 with a glint of hope in their eyes. But there is a brighter side to everything, the optimist in us can show us the other side of this crisis.
Despite the pandemic reducing the pace of venture capital investment, seven startups entered the Unicorn club. They are Zenoti, a SaaS company from Hyderabad; Cars24 used cars selling and buying platform from Gurgaon; RazorPay, a payments company from Bengaluru; e-tech company Unacademy; API development platform Postman; E-commerce firm Nykaa, and payments company Pine Labs.
Despite the invasion of the pandemic, Zenoti which sells software to manage spas and salons raised $160 million at a valuation of $1 billion. In October when the pandemic was at the peak, Razorpay raised $100 million and thus, became a unicorn. Phone, a payment company has raised $700 million at a post-money evaluation of $5.5 billion. After panicking for months, the anxiety within the investors has been extinguished. They are certain to double down on their top bets from India. Combined these companies are valued at almost around $15 billion in a short period.
This is not the end. The tempo of startups transgressing into unicorn has improved. As per The Hurun Research Institute, the average age of Indian unicorn is 7 years out of which 2 are less than four years old. For example, Udaan, an organization established by former Flipkart executives, turned into a unicorn in less than 2 years.
Prolific angel investor and the India managing director of Sequoia Capital, Rajan Anandan evaluates that within the next 5 years, there would be around 100 old unicorns in India. It is because India has almost more than 500 million connected users now, which made it the second-largest smartphone market in the world. In addition to this, entrepreneurs now come up with innovation with a lot more exposure to product building and have a complete ecosystem to get help from. Venture capital too is expanding in the country.
On one hand, there are many startups who are dedicated to the Indian market, on the other hand, there are a set of unicorns that would build the product from India for the world. Zenoti, which has customers globally, and Postman which consists of 8 million developers using their platform, set great examples of startups built from India for the world.
Another wonderful news that caught people’s eyes was the public listing of ad tech company Pubmatic. It is a Pune and California based company that went public on the Nasdaq this month and was valued at over $1.4 billion on the first day of business. This fetches hope for Indian startups- employees, founders, and investors that have conventionally juggled to search for an exit.