Pride in unicorns
PremiumThe business revenue, job creation and tax yield of prized startups must rise sharply from here onwards to justify both the investments made by private entities and the public pride invested in them
On 5 May, India’s tally of unicorns reached 100, Prime Minister Narendra Modi said on Sunday in his ‘Mann ki Baat’ radio broadcast. “You surely know that a unicorn is a startup worth at least ₹7,500 crore," he said, “The total valuation of these unicorns is more than $330 billion; that is, more than ₹25 trillion. Certainly, this is a matter of pride for every Indian." Entrepreneurs, he added, were emerging from smaller cities and towns as well. “This shows that in India, one who has an innovative idea can create wealth."
Indeed, our unicorn boom makes the country proud and speaks of opportunity. However, a global gush of funds, thanks to ultra-loose monetary policies run by central banks in response to the covid pandemic, has resulted in much over-valuation too. The real test will come now, as monetary conditions tighten and performance pressure mounts on venture capital picks. The business revenue, job creation and tax yield of prized startups must rise sharply from here onwards to justify both the investments made by private entities and the public pride invested in them. A large proportion of the 100 are only fledgling successes.