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Startup Newsletter - Jan'23

In this issue:

  • India's 2022 Unicorn Story in Numbers

  • How much Stake should Founders retain?

  • Where do Unicorns park Idle Funds?

  • How much Gap do Unicorns have between each round?

  • What if you had Invested in Indian Unicorns?

  • Best Unicorn 2022 - Zerodha vs rest of the them

  • Should Unicorn be a Measure of Success?

  • 2023 Startup Predictions

  • Around the World in a Blink

 
India's 2022 Unicorn Story in Numbers
 

How Much Stakes should Founders Retain?

Founders Stake in Startups

 

Where do Unicorns park Idle Funds?
Where should startups park idle funds?

 

How much Gap do Unicorns have between each round?

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...

 

What if you had Invested in Indian Unicorns?

At the inception of 2021 we started keeping track of the valuation of all Unicorns in India, subsequent funds raised and the hike in valuations, Startups that emerged as Unicorns during the year and those who lost the coveted status. To share our work with you in a fun and interactive way, we launched our own fantasy investing platform by the name of SIVM. Now that another year has come to a wrap, the numbers have come out beautifully – refer the cards below:



Here’s a way to understand these cards: Movement in the Nifty 50 index, which gained 4.33% in 2022, is often considered as representative of how the Indian markets performed during the year. Similarly, we created the Unicorn Index that represents how the startups performed overall, while the sectoral ETFs show how the specific sectors performed in 2022. For eg, the Edtech ETF shows that the Startups in this sector grew by 13.91% in 2022.

 

Best Unicorn 2022 - Zerodha vs rest of the them

Big News: Zerodha posted its FY’22 numbers and ever since our minds have gone numb. But then again, it might be the winters, we’re not sure.

The country’s largest online brokerage house recorded an 82% rise in y-o-y revenue, reaching ₹4,963 Cr. ($654 Mn) and a whopping ₹2,094 Cr. ($276 Mn) in PROFITS.

To the uninitiated: Zerodha was founded by the Kamath Brothers (Nikhil and Nithin) back in 2010 with the mission to revolutionize the Indian stock brokerage industry. The company has never raised funds but still hopped on the Unicorn bandwagon by valuing itself at $1Bn for ESOP buybacks in 2020. As of Nov’21, the company valued itself at $2Bn, again for ESOP buybacks, per Nithin’s tweet...

 

Should Unicorn be a Measure of Success?

There’s no doubt that when a Startup achieves the coveted Unicorn tag, it’s a moment of pride for its founders, employees, and investors, and now even the general public who have been celebrating the rise of Indian Unicorns like never before. But we ask,

  1. Is the Unicorn tag a mark of success?

  2. What is it that entrepreneurs should rather pursue or aspire to achieve?

  3. So what's a better metric to measure good fundamentals?

 

2023 gutsy Startup Predictions

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.

 

Around the World in a Blink

Unpopular Opinion: Netflix is struggling to make profits because Twitter has more drama. What’s more- when Twitter felt that its grip was loosening, it offered itself as the premises as well as the premise of drama (Twitter’s acquisition by Musk). We’ve handpicked our 3 favorite sagas that literally unveiled on Twitter:

  1. 3 Tweet Bombs by Chanpeng Zhao 

  2. Elon Musk's Twitter Ride 

  3. Ashneer Grover and FAMILY dragging the entire C-suite of BharatPe with them, after being kicked out of their own co-founded Unicorn Startup


 

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