These 6 startups turned unicorns amidst the pandemic

Despite the economic stress brought on by the lockdown, the future looks optimistic and eight startups are expected to join the unicorn club, by end 2020.
Despite the economic stress brought on by the lockdown, the future looks optimistic and eight startups are expected to join the unicorn club, by end 2020.

India is expected to have 100 unicorns by 2025, as per a report titled ‘Covid-19 and the anti-fragility of Indian Startup Ecosystem,’ jointly prepared by TiE-Delhi and global management and strategy consultant, Zinnov. The report also states that with startups recovering and job creation happening, both are expected to match up to and surpass pre-COVID numbers by end of 2020.

Startups are expected to create around 7-7.5 lakh direct jobs and 26-28 lakh indirect jobs by the end of this year.

There, however, has been a dip in overall funding by 50 per cent, as per the report.

The pandemic-induced economic slowdown may have hit some sectors hard, resulting in job losses, pay cuts and businesses being shut down, however, the country has seen a gradual recovery since September. The good news is that 75 per cent of startups are seeing a recovery post lockdown.

Further, despite the pandemic, a number of startups have managed to fight an inconducive environment to raise funds and join the unicorn (privately owned startups valued at USD 1 billion) club.

India has the third-largest startup ecosystem in the world. The country is on track to have atleast eight unicorns by end 2020, on par with 2019 numbers. This will take the total number of unicorns in India to 33.

Six startups have bucked the trend to become unicorns this year. Out of these, four turned unicorns right in the middle of the pandemic.

Razorpay: With its latest USD 100 million fundraising, Razorpay became the latest Indian startup to join the unicorn club. Razorpay’s series D funding was co-led by Singapore’s sovereign wealth fund GIC and venture capitalist Sequoia Capital India. With this, Razorpay has also become the fourth unicorn in the payments gateway space, after Paytm, Billdesk and Pine Labs.

Razorpay was founded by IIT-Roorkee alumni Harshil Mathur and Shashank Kumar has online budget accommodation aggregator Oyo, social media platform Facebook, ed-tech Byju’s, e-commerce platform Flipkart and food delivery startups Zomato and Swiggy as its clients. The six-year-old Bengaluru based company enables businesses to accept, process and make payments through its site.

Unacademy: Unacademy became the second unicorn in the ed-tech scene, after Byju’s after the firm raised USD 150 million in investments from the Softbank-led round of funding, which also saw existing investors Facebook and Sequoia Capital.

The startup had recently announced that it is buying back shares from its current and former employees, allowing them to exercise the option of selling their Employee Stock Option Plans (ESOPs). Launched as a hobby on YouTube, by Gaurav Munjal, Roman Saini and Hemesh Singh, Unacademy helps people prepare for the Civil Services examinations and other competitive exams.

Post Man: San-Francisco and Bengaluru based software startup Postman turned unicorn in June, this year, after raising USD 150 million in a Series C funding round led by Insight Partners. The six-year-old startup has the distinction of being the fastest SaaS startup to reach the unicorn status. Postman is a platform for managing, developing and testing Application Programming Interface (API), or a set of rules that determine how machines communicate with each other.

Zerodha: Currently valued at USD 3 billion, Zerodha is a bootstrapped online stockbroker startup. Trading platform GoldenPi raised Rs 3.5 crore from Zerodha in June, this year, through its fintech incubator, Rainmatter. Recently, Zerodha’s founders, brothers Nithin (40) and Nikhil Kamath (34) topped the IIFL Wealth Hurun India 40 & under Self-Made Rich List 2020, with a wealth of Rs 24,000 crores.

Nykaa: The only beauty portal on the list, Nykaa, became a unicorn in April this year after it raised Rs 100 crore from Steadview Capital. Founded by Falguni Nayar, Nykaa has a portfolio of over 3 lakh products, in partnership with more than 1,500 brands. The company forayed into the fashion sector after it launched Nykaa Design Studio in August 2018.

Pine Labs: Merchant platform company Pine Labs became a unicorn after it entered into a deal with New York-based financial services major Master Card, making it the first startup to enter the USD 1 billion club, this year. Founded in 1998, Pine Labs has evolved from being a card-based payments and loyalty solutions for the petroleum sector player to become a payments and services firm for merchants. It has more than 70,000 retailers, including outlets such as Pantaloon’s, Mark’s and Spencer’s Retail, Shopper’s Stop and Westside.