Unicorn reset: At least 12 Indian startups lose billion

Unicorn reset: At least 12 Indian startups lose billion-dollar status as investors raise the bar

The billion-dollar badge is becoming harder to earn, and difficult to keep.

A Moneycontrol analysis has found that at least 12 Indian startups that were once unicorns are no longer worth $1 billion, marking a significant reset in India's unicorn landscape. Venture Intelligence data shows that Paytm Mall, Hike, ShopClues, Quikr, Snapdeal, Rivigo and MyGlamm have lost their unicorn status. Other startups whose valuations have fallen below the $1 billion mark include Byju's, PharmEasy, Unacademy, Droom and DealShare.

Unacademy is the latest addition to that list. The company is being acquired by upGrad in an all-stock transaction that values it at around $300-400 million, a sharp markdown from its peak valuation of $3.44 billion. The transaction, first reported by Moneycontrol, has since received Competition Commission of India approval.

The correction is largely because investors have ultimately raised the quality bar for India's next generation of unicorns.

"Many founders have realised that the unicorn tag can become a vanity metric if it isn't backed by fundamentals. If you're building a strong, compounding business, you'll eventually grow into a large company," said Kitty Agarwal, partner at Info Edge Ventures.

"The focus today is on reaching the scale, profitability and governance needed to list on the public markets, rather than repeatedly raising private capital just to achieve a unicorn valuation," she added.

Info Edge has backed unicorns including Zomato-parent Eternal, Shiprocket and PolicyBazaar.

India minted 10 unicorns in 2020, 44 in 2021 and 22 in 2022 before the pace slowed to two in 2023, five in 2024 and six last year. So far this year, five startups have crossed the $1 billion valuation mark, taking India's unicorn tally to 121, including the 12 companies mentioned earlier.

Investors say the reset has fundamentally changed what it takes to earn a billion-dollar valuation. During the funding boom, companies were often valued on the promise of future growth. Today, startups are expected to demonstrate sustainable growth, improving unit economics and a clear path to profitability before commanding premium valuations.

That shift is already evident in the market. Moneycontrol exclusively reported that fintech unicorn Slice is looking to raise around $100 million at a valuation just below $1 billion, a correction from $1.4-1.5 billion. Meanwhile, Vanguard has marked down Ola Consumer's valuation to about $70 million from a peak of nearly $1.9 billion as investors grow less willing to support valuations that are not backed by business performance.

The shift follows a sharp reset across much of the previous unicorn cohort. Paytm Mall, ShopClues and Snapdeal lost ground as India's ecommerce market consolidated, while Rivigo sold its core logistics business after struggling to scale its relay trucking model.

Hike pivoted away from consumer messaging after its flagship product lost relevance. Byju's unravelled amid governance issues and debt disputes, while PharmEasy, Unacademy, MyGlamm, DealShare and Droom have all seen their valuations reset as investors became more selective.

"The bar has moved to fundamentals. In 2021, a compelling growth trajectory and a large total addressable market (TAM) were often sufficient. Today, investors want to understand unit economics, gross margins, payback periods and retention. Companies clearing that bar are likely to be more durable businesses," said Abhishek Srivastava, general partner at Kae Capital, known for backing unicorns such as Porter, Zetwerk and InMobi.

The higher bar is already shaping how mature startups prepare for the public markets. In fact, companies such as Meesho and Lenskart, among others, lowered their valuation during their IPO and then saw their share price improve once profitability improved.

"It shouldn't matter to founders or investors, and increasingly it doesn't. For a founder, it's an obligation, not a reward. You've signed up to grow into the number and killed your own sub-billion exit options," said Ujwal Sutaria, founder and general partner at TDV Partners, an early-stage investor.

"A flat unicorn count in a year with 18 listings is healthier than a rising one with zero exits," he added.

The makeup of India's newest unicorns is changing too.

Three of this year's five unicorns, Skyroot Aerospace, Neysa and Sarvam AI, operate in AI or deeptech, unlike the previous cycle, when consumer internet, fintech and edtech dominated billion-dollar funding rounds.

"Consumer internet created unicorns quickly because smartphone adoption compressed timelines. Deeptech doesn't follow that curve. The gestation periods are longer, capital requirements are higher, and the path to revenue is less linear. But the moats are much stronger once established. It may produce fewer unicorns, but more durable outcomes," Srivastava of Kae Capital concluded.

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