It’s now widely believed that 2021 has been a record-breaking year for Indian startups, but it can still be hard to appreciate how extraordinary this year really was.
India produced more unicorn startups in 2021 than all previous years put together. India produced a unicorn startup every 8 days in 2021, which means that a record-breaking 43 startup unicorns were created in 2021. In comparison, India had managed to produce only 37 startup unicorns in all years until 2020 combined, which means that 2021 has seen more startup unicorns — startups valued at $1 billion or more — be created than all previous years put together.
This record creation of unicorn startups was helped by the fact that money poured into Indian startups at record levels as well. In 2021, Indian startups raised a total of $36.1 billion (Rs. 2.7 lakh crore). This was more money than Indian startups had managed to raise in 2018, 2019 and 2020 put together. Indian startups had raised $9.9 billion in 2018, $14.7 billion in 2019 and $11.2 billion in 2020, which at $35.8 billion was less than the money these startups raised in 2021 alone.
And it’s not as though Indian startups only raised money — Indian startups clocked $9.5 billion (Rs. 70,600 crore) in exits, which is among the largest ever. Exits, partial or full, by existing investors of startups through initial public offerings (IPOs), mergers and acquisitions (M&As) and secondary share sales jumped nearly eight times this year from just $1.2 billion, or about Rs 8,900 crore, in 2020. In 2019, the exits had been just $2.9 billion. The exits in 2018, however, had been higher than this year, but that was largely in part to the acquisition of Flipkart by Walmart.
These are all heady numbers, and it’s easy to get carried away and declare that the time of the Indian startup ecosystem has finally arrived. But there are some dark clouds on the horizon too — in a sign that private valuations might be getting overheated, several startups have stumbled at the stock markets. Paytm had India’s worst IPO since 2011 and its stock currently trades 35% below its IPO price; CarTrade has fared even worse, and its stock is trading at nearly half its IPO price. Policybazaar’s stock too has lost most of its early gains, and is now trading below at its IPO price, and some companies like Mobikwik have even delayed their IPOs. There’s little doubt that 2021 was a remarkable year for India’s startup ecosystem, but now the same companies will need to actually walk to the talk and show the growth numbers that investors — and the country at large — has been anticipating.