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Current Affairs

Unicorn status

Date: 01 June 2022 Tags: Miscellaneous

Issue

India has reached a landmark of 100 unicorns, Prime Minister Narendra Modi recently announced.

 

Background

The total valuations of unicorns in India exceed $300 billion and are part of start-up ecosystem.

 

Details

  • Unicorns are venture-capital backed privately held start-ups that have reached a value of $1 billion. 

  • The value of unicorns in not based on the present financial worth of these venture but based on growth potential that venture capitals have perceived.

 

Origin of term

The term unicorn was coined by American venture capitalist Aileen Lee in 2013. The rarity associated with such start-ups was the reason for the name.

 

Existence of unicorn companies

  • Achieving unicorn status has become common these days but it is still a coveted title that helps gain industry attention.

  • Private and market funding has allowed more unicorns to emerge, faster.

 

Unicorns in India

  • During the pandemic last year, a record 44 unicorns were established. In the first three months this year, 14 unicorns came into existence.

  • The maximum number of unicorns— 44, 11 and 7 came in the years 2021, 2020, and 2019 respectively.

 

Future prospects

  • India’s startup ecosystem has seen nine-time increase in the number of investors, and a seven-time increase in the total funding of startups between 2015 and 2021.

  • India is slowly transitioning from an era of unicorn to decacorn, where a company has attained a valuation of more than USD10 billion.

  • Companies with decacorn status in India include Flipkart, BYJU’s, Nykaa and Swiggy. All over the world, there are 47 decacorn companies.