Opening the can of unicorns

The usage of ‘unicorn’ to describe a tech company worth at least $1 billion is a coinage of the past decade, but the first of its kind may well date back to 1960s, with semiconductor giant Intel as the exclusive club’s first member. Then came Apple, Oracle, Microsoft, Google, Amazon and Facebook—a rare, once- or twice-in-a-decade phenomenon in that era—that went on to become the ‘super-unicorns’ (worth over $100 billion). It was only by the 2010s that the club opened, as the number increased to include non-American and Indian startups, too. At last count, the world had roughly 800 unicorns (as per CB Insights, a global database on internet venture funding).  

India, as of mid-August, is home to roughly 50, half of them minted in 2021 (excluding buyouts and flameouts). This surge catapults it to No 3 in the world, after Silicon Valley and China (albeit, a distant third)—a surefire sign that the country’s tech startup scene has crossed a new threshold.

Aileen Lee, founder of seed stage fund Cowboy Ventures, introduced the terms unicorn and super-unicorn to the startup lexicon eight years ago to analyse the prospects of the 39 $1 billion-plus tech ventures Silicon Valley boasted till 2013.

Lee’s findings, which she put out in TechCrunch, suggested that .07 percent, or 39, of roughly 60,000 internet and software companies funded in the 2003-2013 decade went on to become unicorns. That strike rate would have shot up since, what with the US boasting over 400 unicorns as of mid-August.  

Let’s do a similar, though not comparable, exercise for India now. According to tech media platform Inc42, India had some 3,436 funded tech startups in the 2014-2020 period. The number of unicorns created in that period is 34 (including buyouts and flameouts). Which would mean that just under 1 percent of India’s funded tech ventures went on to become unicorns till 2020.