25 startups drop out of Hurun’s latest future unicorns list

A record 25 startups have dropped out of the ASK Private Wealth Hurun India Future Unicorn Index 2024, reflecting an extended funding winter that has reset the valuations of several new-age firms.

A unicorn is a startup worth at least $1 billion. Hurun identifies “potential unicorns” as those started in the 2000s, valued at over $200 million, not yet public, and likely to become unicorns within three to five years–labeled as gazelles and cheetahs, respectively.

In its latest edition, Hurun Research has spotted 152 future unicorns across 31 cities. On average, these startups were set up in 2015, with most selling software and services and about 18% selling physical goods.

The list shows grocery delivery startup Zepto rocketed to unicorn status in August 2023, while InCred Finance broke through the valuation rankings to join the elite club in December. Homegrown logistics platform Porter claimed unicorn status in May this year.

Most startups on the index were seen disrupting financial services, business management solutions, education and healthcare.

“There is an increasing focus on profitability and sustainable operating models, with 22 of the list entrants making profits in FY23. More than 150,000 people are employed at future unicorns. These are green shoots of tangible impact metrics,” Rajesh Saluja, chief executive officer and managing director of ASK Private Wealth, said in the report.

Anas Rahman Junaid, MD and chief researcher at Hurun India, said: “Amid a funding winter, inflated pre-2021 valuations, and setbacks from companies like Byju’s, the once golden startup ecosystem now faces a crucial turning point. Despite 44 companies dropping out of the index over the past year, this year’s index welcomes 38 new entrants.”

“Aerospace, in particular, stands out as one of the hottest sectors to watch. AI companies in the index have received a combined $1.6 billion in funding, while those in aerospace have garnered $160 million, and EV companies have attracted $1.2 billion,” Junaid said, adding that the significant gap in funding for aerospace when compared with other sectors highlights the enormous growth potential.

“An economic slowdown has posed challenges for specific companies, with 24% of last year’s gazelles/cheetahs (startups expected to reach unicorn status in three/five years, respectively) either falling off the list or being downgraded,” Junaid said, adding that rising interest rates and geopolitical challenges have created hurdles for startups in raising capital.

Top investors

Peak XV Partners (formerly Sequoia Capital India and SE Asia) emerged as the top investor in the list, with Turtlemint, CleverTap and Classplus being among the top portfolio firms out of a total of 47 investments.

Accel Partners, which has invested in 25 startups that are poised to become the next generation of unicorns, including Money View, Ninjacart and Stanza Living, was ranked second on the list.

Tiger Management Global, with investments in 21 gazelles and cheetahs, including Ather Energy, Captain Fresh and Classplus, was ranked third.

Top angel investors

Anand Chandrasekaran, a partner and investor at General Catalyst with investments in 20 future unicorns, was the top angel investor in the list, followed closely by Kunal Bahl, with 11 such investments. Kunal Shah stood third with investments in nine companies.

Top sectors

Among sectors, fintech led the future unicorn index with 30 companies in line to achieve unicorn status in the next three or five years. The software as a service and (SaaS) e-commerce sectors followed with 20 and 15 startups, respectively.

Collectively, the three sectors constituted 43% of the companies in the index.

Where are the startups based?

India, which is currently home to 67 unicorns, is the third-largest startup ecosystem globally, with Bengaluru being home to 46 startups with a cumulative valuation of $18.3 billion.

Delhi NCR played host to 29 future unicorns with a cumulative valuation of $10.3 billion, while Mumbai is home to 19 potential unicorns with a cumulative valuation of $6.5 billion.