Indian Start-ups in the Billion Dollar Club: The boom and the potential

Over the last decade and half, India has shown immense potential in terms of economic growth. The excitement has been more than visible and most importantly, it is not a marketing effort at all! India didn’t take the Chinese hard line to sell its potential, thus emerging a single player.

Instead, the country has worked on robust economic weather, policies and quite in an unconnected manner; the country’s population has been a boon of sorts too. The increased population bursting at its seams was seen as some kind of a threat to Indian economy and food security which couldn’t have sustained in the long run, unless the country turned it around. It did, and how! India today is the most sought after destination for all kinds of needs involving human resources. What’s more, the country even has skilled, educated and work-ready culture in its surroundings. No wonder, startups in the country have been standing on the threshold of entering the billion dollar club in the coming days!

To give a broad sense of understanding, Asian start ups make for nearly 11% of the billion dollar companies internationally among a total of 73 companies. China, which has been witnessing a steady growth given its huge manufacturing potential and capabilities, takes a lion’s share. However, India has its strength in tech-powered growth and the new age economy is certainly its forte.

While there are eight Chinese companies that make it to the prestigious list, India is soon catching up with exactly half the number. Four Indian companies have already made it to the list. With President Obama’s recent visit to India, the predictions of Indian business weather have been more than bright. India is soon emerging as the desirable economy with sustained growth. Indian investment opportunity remains unparalleled at the moment.

Technology investors have taken good notice of the impending boom. In 2014, about $918 million worth venture capital was invested in about 252 early and growth-stage companies. Every day with new companies joining the list, India is at a point where it is called the ‘softbank’ moment, with private equity in 2014 amounting to $9.8billion across 192 companies. The average investment remains at $52 million.

Leveraging on the new economy, India has created its own consumer and enterprise breakout companies with three ‘unicorns’ such as Snapdeal, Olacabs and Flipkart making it to the list. Let’s just hang in there and understand what the term Unicorn companies actually means.

While the technology industry is crowded with billion-dollar startups, the term Unicorn came into existence with Cowboy Ventures founder Aileen Lee coining it. In the beginning, the billion dollar start up seemed to be a stuff made of fairytales and myth. But today, they are found everywhere. No wonder the word Unicorn sounds like a myth that’s entered our lives without much hullabaloo about it. And, what’s more, it is real and here to stay! This is the biggest contribution tech world has been able to make, while contributing to economy and forward looking perspective to the coming days; and also in the way new businesses would be created.

Today, there are more than 80 companies worldwide that have entered this elite club. And, the net is surely cast wider and stronger.
The rise of Unicorn has been a stuff that speaks of both potential and strength. It has occurred without much warning, skepticism and so much so that it is really beginning to change the way things are looked at in the new economy.

While being the billion dollar startup makes it tangible for companies to begin turning their business plan more robust and stay accountable in the long run, it also means another thing. Apart from assuring a definite growth, being called a unicorn or a billion dollar startup also means, you are not a fly-by-night company which can remain dismissive about what your future looks like. You better be ready with some sound answers when the VCs come knocking your doors to check on the company’s well-being.

US companies have stayed ahead of the competition since long owing to conducive atmosphere. India is surely racing past Europe in terms of the highly valued start-up companies. Flipkart, Snapdeal, Olacabs and InMobi -- all companies that were created on tech platform in less than a decade have found place in the billion dollar club, with more names waiting to join them.

Breaking into the category wasn’t easy. But having broken barrier, Indian companies will surely pave way for more such ventures to make it to the list. India is seen as the next breeding ground for start-ups only next to China. Chinese company Xiaomi valued at $46 billion made it to the top of the list.

Venture capitalists who have invested in these forward looking fortune companies have done so on a cautious note. Innovative or strange as it may seem, depending on which way you would be looking at it, the VC have been looking backward to learn their lessons before stepping any further. Soon after the dotcom bubble burst in beginning of the millennium, a wave of prudence was what covered the tech world. Investors kept valuations low and tried not to overcapitalize their companies. This worked well till the social media came along. Once the media became the alternative existence for people who literally live online, more than they do offline, investors sat up and took notice.

Since then, the unicorn has never been a stuff of myth. It just turned into a reality that’s tangible and smart!