As many as 25 prospective unicorns have been shunted out of a coveted list of start-ups — afflicted by a funds squeeze, regulatory actions and insistence on profitability by funders.
The ASK Private Wealth Hurun Indian Future Unicorn Index for 2024 listed 67 unicorns, 46 gazelles — who could turn unicorns in three years — and 106 cheetahs (unicorns in five years). In the 2023 index, there were 68 unicorns, 51 gazelles and 96 cheetahs. Unicorns are start-ups with valuation of $1 billion.
Hurun Research Institute made its evaluations based on regulatory filings, and feedbacks from other entrepreneurs and some of the active India-focused venture capital funds and angel investors.
Rajesh Saluja, CEO and MD of ASK Private Wealth, said the start-up valuations have been affected by the ongoing funding winter, with elevated interest rates and slowdown in demand for certain sectors making investors very cautious.
Regulatory actions have also affected valuations of fintech companies, he said.
Further, growing insistence on profitability by the external investors has hit valuations. Hurun India’s chief researcher Anas Rahman Junaid pointed out the uneven consumption growth may have affected valuations in some cases.
Saluja observed that venture capital funds are holding on to cash on account of lack of sufficient opportunities, and that only 35-40 per cent of committed amounts are being utilised for investments by funds.
However, investments made by high net worth and ultra-high net worth families have helped to reduce the impact of funding winter on the ecosystem. Saluja said 2023 saw $8 billion investments in start-ups against $38 billion earlier.
Among the start-ups that dropped out included CogoPort, NeoGrowth, Simple Energy, Gaana, Koo, Rapido, Dunzo, Paper Boat and Practo.
On the other hand, Zepto, Incred and Porter exited the list after achieving unicorn status.
Peak XVPartners continues to be the most active investor in the list with 47 bets, while Anand Chandrasekaran is the leading angel investor with stakes in 20 future unicorns, it said
The combined revenue of companies in the 2024 index surged 71 per cent to ₹51,422 crore.
