India to hit 150 unicorns by 2025: Report
India could add 95 new technology companies to its unicorn club by 2025, bringing the total number to 150, thanks to ultra-high-net-worth individuals investing about $30 billion in them, a report by 256 Network and Praxis Global Alliance, entitled ‘Turning Ideas into Gold’ stated.
Around 190 soonicorns are expected to turn unicorns by 2025, and over 250 private tech companies — with valuations over $100 million — could chart a path to their public listing, the research report further stated.
By 2024, India could see around 10,000 UHNI, including business leaders, celebrities, NRIs, and digital entrepreneurs, with a net wealth of $70 billion, the report added. UHNIs and HNIs form a considerable percentage of investors in the Indian startup space today, and most of them make these investments via Family Offices that function as full-service private wealth management endeavours.
"Technology investments have emerged as a lucrative alternate asset class to traditional investments like equity, debt, commodities, and real estate. However, it is difficult to get exposure to high growth portfolios, which use technology to solve real challenges and build large companies in a relatively short period of time," Kris Gopalakrishnan, Co-founder, Infosys, and Promoter of Pratithi Family Office, said in the press release announcing the research report.
"Backing such companies requires deep expertise, strong networks, patience, and sufficient capital. Funds run by professionals provide that opportunity to Indian Family Offices and UHNIs," he added.
At present, venture capital and private equity investments make up only 20 percent of Family Offices' total investment portfolio, although they yield 30 percent in returns. With the right capital infusion, India's tech sector can mirror the US, and Indian family businesses have the potential to make that happen, the report suggested.
"While the exact size of underinvestment of Rupee Capital varies, our conversations with Indian Family Offices within the 256 Network highlighted that over two-thirds of this peer group still wait and watch when it comes to investing in VCs," Dhruv Sehra, Founder of 256 Network, said.
Most of these Family Offices prefer staying invested in traditional assets such as gold, stocks, and real estate, and fail to benefit from solid returns yielded by venture capital investments.
"This is because the risk-reward payoff for such investments is not well structured for potential investors. 256 Network aims to bridge this gap through this report," Dhruv added.