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2023 Gutsy Startup Predictions

Updated: Feb 28, 2023

1 Agritech Unicorn – Despite the looming funding winter, Agritech startups raised over $500 Million in 2022, which is 3 times of the amount raised in 2020. As internet and fintech penetrate deeper into rural India, Agritech solutions are becoming increasingly sought after, making the sector all the more attractive for investors. In the past 2 years, several promising soonicorns have emerged like NinjaCart ($775M). WayCool ($775M) and DeHaat ($700M). As investors continue to bet big on the sector, we foresee emergence of at least 1 Agritech Unicorn in 2023.

2 Applications in Generative AI – This sector has lately seen heightened attention from VCs in the west, who have already pumped in billions into the sector. Indian startups have so far lagged behind their western counterparts, however, not for long. We are likely to witness at least half a dozen VC-funded Indian startups building new applications using generative AI in 2023.

3 Soonicorns in Spacetech – Liberalisation of the Indian space sector has resulted in a race among Indian startups trying to build indigenous solutions in this area. Taking cue from the success of SpaceX (valued at $140 Billion), investors will back startups pursuing viable and scalable solutions. We foresee emergence of at least 2 spacetech startups in 2023 with $500 Million + valuation.

4 Startup IPOsNot more than 2 unicorns will go public on Indian bourses in 2023, largely owing to the heavy beating that new age tech stocks have taken in the Indian stock market and the overall pessimism around economic growth. However, up to 5 startups (other than unicorns) will list in 2023, mainly the ones that are profitable.

5 Unicorns that will turn profitable in FY22-23:

Zetwerk: This online B2B marketplace providing manufacturing services recorded a historic year in FY’22 as its topline grew by almost 6 times to ₹4,961 Cr.🛫 ($661Mn) while its net margin improved from -4.97% to -1.2%. What’s more, In Nov’22, Business Standard reported that Zetwerk claimed to be on track to crossing $1Bn in revenue in this financial year and had an open order book of ₹9,750 Cr. The company also acquired its peer in the USA named Unimacts to expand its customer base in North America where it already has a growing presence. Zetwerk’s competitor Unicorn OfBusiness that recorded a turnover of ₹7139 Cr. ($951Mn) has been declaring profits since the last 3 years, which is another strong indication of prevailing positive unit economics in the sector.

XpressBees: This Unicorn provides E-commerce fulfiment solutions to businesses. In the past 3 years, the company has seen its revenue grow by 2.53 times to ₹1930 Cr ($257Mn) whiles its net margin has improved from -13.5% in FY’20 to to -1.4% in FY’22. It’s peer Shiprocket has reported profits in 2 out of the previous 4 years, again indicating prevailing positive unit economics in the sector.

Flipkart: This bet is coming straight from our heart, but we may lose. One of India’s first Unicorns, Flipkart is on the verge of breaking-even for the 1st time since its inception in 2007. The company exceeded ₹50,000 Cr. ($6.8Bn) in sales in FY’22 while recording a negative gross margin of only 4.29%. Since the last 2 years, Flipkart has been leading the festive sales of Sep-Oct with a market share of over 60%, a key indicator of its market influence. As put into perspective by its holding company, Walmart International’s CEO and president Judith McKenna when speaking at Baird 2022 Global Consumer, Technology & Services Conference in New York,

“[Flipkart] has shown clear proof of value…and that we've been happy at every step of the way over the four years that we've made the investment. So, they've achieved our expectations, and they've delivered what they need to deliver.”

Note: This is just us thinking out loud. This article may not be construed as a financial advice.

This article is a part of the January'23 edition of our Startup Newsletter. Here's the complete publication:


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