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How much gap do Unicorns have between each round?

Updated: Feb 5, 2023

Have you ever found yourself stumped at the Subway counter, not knowing when to stop asking for more olives? Or is it just us?

Guess, raising money for Startups comes closest to that. When is the right time to start raising? If you start too soon, they may go, “You don’t even have a pla !!” And if you’re too late, wellll it might as well be too late!

So, we ran the numbers. We collated the timing of raising funds of 88 Indian Unicorns to figure out what’s the industry standard for the usual interval between 2 rounds. Interestingly, it turns out, the median interval across different series is quite consistent and it comes to around 12-14 months. Which means if you’re raising in Seed Round today, it’s apt to scale up at a pace such that your funds last for 12-14 months by which time you can target to raise in Series A round. And then giving another 12-14 months for Series B round and so on:

  • Incorporation --> Seed Round: 8 months

  • Seed Round --> Series A: 12 months

  • Series A --> Series B: 14 months

  • Series B --> Series C: 13 months

That also makes us wonder:

What if you’re AGAIN raising with a higher valuation too early?

More often than not, it signifies a hot investor market. You’re probably selling the right product at the right time and you’re performing well. So you have a line of investors, willing to pump in more money at a higher valuation. Take for example Oyo- It’s Series A round took place in Mar’15 while its Series B round happened in Aug’15 (just a span of 5 months). During this same interval, AirBnB (foreign counterpart of Oyo) witnessed its biggest funding round, raising $1.5Bn at a valuation of $25.5Bn, i.e. Red Hot investor market. Between Series A and Series B, Oyo’s valuation jumped from $87Mn to $388Mn (4.5 times).

What if you’re re-raising too late?

Either things are going so well that you’ve turned profitable and you don’t really need funds anymore. In which case, you eventually re-raise when you’re not too happy with the present scale of operations, so you need capital to scale up.

Or, things are going so bad that there’s no one willing to give you funds at a higher valuation. In which case, you have to get your affairs in order and/or wait for the funding markets to improve or just settle for a down round.

Take CarDekho for example- It raised $50Mn in Series B in Jan’15. However, it took the Startup 3.5 years to finally raise $75Mn in Series C in Oct’18. Between these 2 rounds the Company saw its valuation jump by only 29% to $504Mn. In Jul’18 they even raised Venture Debt to keep the company afloat.

On the other side is BillDesk- It raised $153Mn in Series B round in Oct’15, at a valuation of $617Mn. Again, it took the Company 3.5 years to raise a Series C funding, but at a valuation of $1.59Bn. That’s more than 2.5 times of jump in valuation. When you look at its financials, you’ll see that it has been making profits since the last 8 years. So the company only raised money when it wanted to scale up further.

There's also a 3rd option, where you've defined your own pace of things. Honestly, it's alright to take more times to figure out a way. As long as you have enough money to pay the bills for the next 6-12 months, it's okay even if you're taking more time to raise funds.


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

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