Five start-ups turn unicorns in just a week, raise cumulative USD 1.2 billion

BENGALURU : Even if India’s tech start-up scene had experienced a previous golden age, it is unlikely to have come anywhere close to these first few months of 2021.

In the middle of a resurgent pandemic, with the country gradually shutting down once again, it has been raining unicorns.

This week alone has seen the birth of five new billion dollar start-ups (unicorns), all of which raised a cumulative capital $1.2 billion in capital and were spread across a wide range of segments such as social commerce, content sharing, investment and fintech.

Compared to the eight unicorns that were created in 2019, this year has already witnessed the birth of nine such billion dollar start-ups, clearly a sign of strong investment sentiment in the ecosystem.

And New York-based based investment firm Tiger Global has invested in four out of the five companies that became unicorns this week—Sharechat, Groww, GupShup, and Cred.

The investment firm had earlier closed a $6.65 billion global fund and is looking to double down on its investments in Indian start-ups.

Besides Tiger, another deeppocketed investor, Sequoia Capital, has also placed several bet among these companies .

Tiger Global has led a $500 million funding round in local social media network Share- Chat, almost trebling its valuation at over $2 billion, an $83 million Series D fundraise in Groww, a $100 million round in messaging platform, Gupshup and participated in a $215 million fundraise in credit card payment start-up Cred.

With the pandemic accelerating the adoption of digital solutions across sectors, tech startups have leveraged the opportunity to tap into the investments worth millions of dollars and leveraging the millions of users onboarding on to these platforms.

Despite a second Covid wave hitting the country hard, investments haven’t dried up, with huge bets relying on the promise of India’s hinterlands (beyond metros, tier 1 towns) as as smartphone reach and data accessibility widens.

Besides the unicorns, food delivery major Swiggy also raised $800 million from a bunch of investors recently, taking its valuation to $5 billion, even as the competition heats up with rival Zomato heading for an IPO soon and ecommerce giant Amazon rolling out food delivery in Bengaluru with plans to expand to other cities soon.

However with the investors knocking at the doors of founders, some are wary.

Zerodha’s founder and CEO Nithin Kamath said recently that even as the big cheques are being written, start-ups are using the same for marketing and advertising which is not his company’s focus currently: “We don’t need the money, so there’s no point in raising money just because someone is ready to give it to you”.