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Where do Unicorns park Idle Funds?

Time and again you must’ve heard in 2022 & 2023 (59 times to be precise), that a Startup raised funds north of a hundred million dollars. Of course, all the news about mammoth valuations took the limelight, but did you ever wonder where these Startups park these fat cheques until they actually want to use them?

We handpicked 6 Unicorns which were flushed with accumulated funds of $1.51 Billion as on 31st March’23, and found out their strategy of dealing with idle funds. Here’s what it all boils down to:


Out of the total funds,

  1. 60% was found to be invested in current investments, which are liquid and therefore can easily be used for operations when required. Following were the most common types of instruments within this category:

    1. Commercial Papers (25% of total amount)

    2. Inter-corporate deposits (14%)

    3. Mutual Funds (13%)

    4. Unquoted Bonds & Debentures (6%)

  2. 35% was invested in short-term deposits with banks

  3. 5% was kept in bank

  4. Only 0.18% was found to be invested in long-term instruments


Source: Startup Indian analysis, based on published financial statements of 6 Unicorns for FY22-23.

 

This article is a part of the January'24 edition of our Startup Newsletter. Here's the complete publication:


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