Industry experts weigh in on the art of growing from minicorns to soonicorns to unicorns
In a freewheeling conversation on Day Two of TechSparks Mumbai, Vineet Sethi of PayU; Firasat Durrani of Loco; Ankur Mittal of Inflection Point Ventures; and Rahul Tewari of Games24X7 discussed the most effective growth strategies for startups aspiring to be unicorns.
Wednesday April 05, 2023,
5 min Read
In a country witnessing rapid growth, it comes as no surprise that India also has one of the fastest-growing startup landscapes in the world. It is, in fact, the third largest startup ecosystem in the world and is also ranked third in terms of the number of unicorns.
More than 100 tech startups have entered India's prestigious unicorn club. They have more than $332 billion in total valuation, cover more than 32 sectors, and have created over three million jobs.
With many soonicorns and minicorns waiting in the wings, a panel comprising Vineet Sethi, SVP - Diversified Financial Services,; Firasat Durrani, Co-founder & VP, Operations, ; Ankur Mittal, Co-Founder, Inflection Point Ventures; and Rahul Tewari, Chief Financial Officer, ; weighed in on the most effective growth strategies for startups aspiring to be unicorns through the lens of the markets they operate in, and to understand which growth levers work best and when.
What does it mean to disrupt?
Loco’s difference lies in how it is evolving the modern fan experience and leveraging technology to disrupt fan engagement in India. Talking about how the team made it a strong growth lever, Durrani, who oversees all aspects of Loco's operations, including business partnerships and growth, said, “From the early days, Loco has always been completely focused on the fan experience, because that's ultimately what our product actually is.”
“We didn't invent game streaming, or the games that we stream, or any of the categories. We didn't even invent the communities we host. The only truly differentiating factor is the curation of the fan experience. It's important to make sure that somehow the users feel as close to the thrill of the game,” he added.
Expanding how delivering for customer experience was a key growth fulcrum for Games24X7, which was India's 99th unicorn, and how they maximised it by studying customer behaviour, Tewari said, “To a certain extent, we are data handlers who love to study customer behaviour. Millions of people are playing on our platform currently. That is the behaviour that we want to study, and deliver an awesome gaming experience.”
“Gaming is going through a transformation in India. Consumption habits are changing. People are looking at snackable content. That is where we’re looking to maximise their experiences and value for money,” he added.
Common scale strategies to transform startups into unicorns
Inflection Point Ventures has helped 167 startups get funded and Mittal is no stranger to the all-important growth phase of making it to Series A.
“Two factors are critical growth levers for startups - product-market fit and the total addressable market,” said Mittal, contextualising the critical phase between starting up and scaling up - and what startups needed to get right at the very beginning.
“Across the world, startups face their toughest hurdles scaling from inception to Series A. Statistics show us that around 70% startups do not make it to a Series A round,” he said.
Mittal advised startups to align their product to the market to succeed during this critical growth phase and to “start small, and go deep”.
“I think we are just looking for opportunities in the whitespaces around us. It could be M&A, it could be a majority transaction, we also launched in 24x7 Ventures, our attempt to invest in the ecosystem with minority deals.,”
PayU’s Sethi also contextualised how strategic acquisition was a key growth accelerator for the payments leader, having recently added Wibmo and Pay Sense to the PayU family.
Lessons from PayU’s high transaction success rate
Having bagged a 12 % higher transaction success rate, the best in the industry so far, Sethi spoke about PayU’s payment gateway journey and the insights and processes that helped build a product that works so well.
“At PayU, we’ve always been built for scale. We’ve worked with large ecommerce players from very initial days, and that pushed us to do a great job behind the scenes, from the beginning. Our entire office prepares for high volume sales seasons three months before the season, and no stone goes unturned to give our customers and, in turn, their customers a satisfactory experience,” he said,
To further build on its customer centricity PayU recently launched Test Mode, a dashboard allowing vendors to test all features available to their customers. This mode lets one could experience the checkout from a customer’s perspective for greater customer centricity.
Sustainable growth in a competitive industry
Durrani said there are two important aspects to growing in a competitive dynamic. “One is, how do you get that growth? And the other is how do you sustain that growth?”
He added that to really delve deep into finding your North Star for growth and then harness it for sustainability, one has to understand that there will always be inflection points where you “sort of get carried away by your own delusions”.
“However, to be honest, as an entrepreneur, I believe a little bit of delusion is important. It's the crazies who will change the world,” he said.
Tewari said Investment mood, product innovation, and user recognition are the three factors for any industry to grow. “For any startup to reach soonicorn or unicorn level, at least two of these points need to hold the right place so that you can arrange the third one.”
He also spoke about the metrics he considers most important when evaluating startups for scalability.
“Inflection Point has an extremely thorough due diligence process, where we look into 30+ variables to evaluate a startup. However, it boils down to three key factors: good businesses, great founders, and good valuations. If you get those three together, more often than not, you'll be right,” Tewari said.