Almost one in five of India’s future unicorns drop off the race as funding winter bites

• Rising interest rates and global uncertainties have dramatically reduced the appetite of investors to put money into startups.
• Eight gazelles were demoted to cheetahs and another 19 were dropped out of the ASK Private Wealth Hurun India Future Unicorn Index 2023 altogether.
• The cumulative valuation of the 51 gazelles in the Hurun list experienced a year-on-year decrease of 1%, amounting to $30.8 billion.
• The cumulative valuation of cheetahs however went up by 47%, amounting to $26.3 billion.

India’s most valuable startups have been finding it tough to hold on to their value, thanks to the rising number of ‘down rounds’ and a funding winter that set in last year. According to the latest report by ASK Wealth and Hurun, 20% of startups, i.e. one in every five, in its list of ‘future unicorns’ dropped off the list or got downgraded.

The ASK Private Wealth Hurun India Future Unicorn Index 2023 has named 147 future unicorns across 25 cities in India — is showing signs of slowdown. The list names gazelles which are expected to become unicorns in three years, and cheetahs that are expected to become unicorns in five years.

Double promotions & ominous exits

Rising interest rates and global uncertainties have dramatically reduced the appetite of investors to put money into startups in the past half year, said Anas Rahman Junaid, Hurun India founder and chief researcher.

There are nonetheless 147 companies that Hurun believes are most likely to ‘go unicorn’ with a $1 billion valuation in five years – which is a new record. The cumulative value of the future unicorns in the index went up by 16% to $57 billion, mostly because of the addition of new startups to the list.

“The slowdown in the economy has been tough for certain companies, with almost 20% of last year’s gazelles and cheetahs either dropping off the list or being downgraded. Hurun Research believes these companies could no longer go unicorn within three years. Rising interest rates and geopolitical headwinds have combined to make it harder for startups to raise capital,” said Junaid.

As many as eight gazelles were demoted to cheetahs and another 19 were dropped out of the index in 2023. Logistics company Shiprocket and fintech OneCard were upgraded to unicorns. Another successful exit from the list is consumer electronic company BoAt that received a ‘double promotion’, skipped the gazelle stage and entered the unicorn club from a cheetah.

Troubled startup GoMechanic however lost its gazelle status due to alleged financial misreporting and was eventually sold on a slump sale. Ezetap, which was a part of the index last year, was acquired.

The top Gazelles & Cheetahs

The cumulative valuation of the 51 gazelles in the Hurun list experienced a year-on-year decrease of 1%, amounting to$30.8 billion. But they did manage to collectively raise a substantial funding of $9.6 billion.

The notable gazelles in the list are — EV startup Ather Energy, Quick Commerce startup Zepto, and edtech Leap Scholar with Observe.AI and agritech Ninjacart following close behind.

Gazelles in the ASK Private Wealth Hurun India Future Unicorn Index 2023

Unlike gazelles, the cumulative valuation of cheetahs in the index experienced a remarkable year-on-year increase of 47%, amounting to $26.3 billion. India has 96 cheetahs, who collectively secured funding of $9.3 billion.

Cheetahs in the ASK Private Wealth Hurun India Future Unicorn Index 2023