What is a unicorn startup and how can your business become one?
Here are some common characteristics of most unicorn startups, which will help you understand how your business can become a unicorn too.
Did you know that India, which is the third-largest startup ecosystem in the world, is home to 108 unicorn startups?
You may have come across the term ‘unicorn startup’ several times and wondered what it is. A unicorn startup is a startup company with a valuation of $1 billion. This term is generally used by the venture capital industry.
The word ‘unicorn’ was coined in 2013 by Aileen Lee, the founder of Cowboy Ventures and a venture capitalist. Lee first used the term ‘unicorn’ in a blog post, which stated that there were 39 US-based software companies with a valuation of $1 billion. The term became popular and has been in use ever since, in the world of business and finance.
Today India is emerging as a fertile ground for unicorns. According to reports, the country could have over 150 high-value startups by 2025.
Characteristics of unicorns
It is certainly not easy for a startup to become a unicorn overnight. It takes more than hard work and dedication for a company to achieve a high valuation.
Here are some common characteristics of most unicorn startups, which will help you understand how your business can become one too.
Innovation
A majority of global unicorns have disrupted the market with innovative products. For instance, Canva is a must-have app for designers, Airbnb has changed the way we use holiday rental spaces, and WhatsApp is now a globally recognised messaging application.
So, your business should thrive to introduce a unique product or service that can disrupt and eventually dominate the market.
Pioneers
Most unicorn businesses are the first ones to bring a product or service into the industry. This gives them an upper hand to create consumer demand and change the way products and services are consumed.
Tech-driven
Unicorn startups are largely technology-based. In simple words, their business model runs on powerful technology that creates impact. Companies in the industries of food tech, IT and ed-tech have technology at their core.
Social media-savvy
To reach a target audience, unicorn companies take advantage of social media platforms such as Instagram, Twitter and Pinterest. They build a strong presence for their brands online in order to connect with their target market.
Customer-centric
Successful businesses keep their customers at the forefront of everything they do–from conception and manufacturing to selling and after-sales. Unicorns strive to enhance the user experience at every stage.
Growth mindset
Apart from focusing on revenue, unicorn startups also aim to scale their business. To accomplish this, they have a clear business plan and a scalable model and nurture a growth mindset.
Unicorn startups in India
Here is a list of a few notable unicorn startups in India.
Swiggy
Swiggy is a popular food-tech company founded in 2014 by Sriharsha Majety, Nandan Reddy, and Rahul Jaimin. This Bengaluru-based startup earned the unicorn title in 2018.
BYJU’s
BYJU’s is an ed-tech company founded by Byju Raveendran and Divya Gokulnath in 2011. Headquartered in Bengaluru, BYJU’s is an online learning platform for students from kindergarten to college. The company crossed the $1-billion mark in valuation in 2018. Some of the big investors in the company are Sequoia Capital India, Tencent Holdings, and Lightspeed India Partners.
PayTM
PayTM is a Noida-based fintech company that was founded in 2010 by Vijay Shekhar Sharma, under One97 Communications. It offers financial services and mobile app payment options. The startup became a unicorn in 2015.
Razorpay
Razorpay is another Bengaluru-based startup founded by Harshil Mathur and Shashank Kumar in 2013. This firm provides a payment gateway for transactions. The fintech company achieved unicorn status in 2020.
OlaCabs
Bhavish Aggarwal and Ankit Bhati started Ola Cabs in 2010. It is a ride-hailing startup that offers auto and taxi rides. In just five years, Ola Cabs became part of the unicorn club in 2015. SoftBank Group and Sequoia Capital are some of its investors.
Unicorn trivia
Which is the youngest unicorn startup in India?
Mensa Brands, which was started in 2021, is said to be the youngest startup in the country to join the unicorn club within six months of its launch.
What are some of the unicorns of 2022?
In 2022, the following companies became unicorns: Mamaearth, Fractal,
LEAD, Darwinbox, DealShare.
Is Zepto a unicorn?
No, Zepto is not yet a unicorn but it is likely to be a high-valuation e-commerce startup in India soon.
Edited by Swetha Kannan