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73 of India’s 100 unicorns have at least one founder from IIT

A majority of India’s 100 unicorns, most of which were crowned unicorns only over the last two years, have founders with an IIT background.

May 13, 2022 / 01:37 PM IST

In his book, The Golden Tap, serial entrepreneur Kashyap Deorah had described how Lee Fixel, a former partner with Tiger Global, used to filter potential startups on the basis of the founders' caste and JEE (advanced) ranks.

Only candidates with high JEE (joint entrance examination) ranks make it to India’s premier technical institutes -- the central-government owned Indian Institutes of Technology, commonly known as IITs.

“Fixel preferred North Indian Marwari banias with single or double-digit JEE ranks who were young and first-time entrepreneurs. An analysis had probably revealed that such entrepreneurs were the best performers in the companies Tiger liked funding,” Deorah had written.

Fixel had led negotiations for funding rounds for Tiger Global in unicorns like Flipkart and Ola, which were among the New York-based hedge fund’s largest bets in India.

Both the companies best fit Deorah’s description as Sachin and Binny Bansal, founders of Flipkart, come from IIT Delhi, while Ola’s Bhavish Aggarwal comes from IIT Bombay.

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It may be recalled that Tiger Global got one of its biggest exits when Walmart Inc acquired Flipkart in 2018 for $16 billion, yielding the hedge fund about $3 billion.

Investing in entrepreneurs from IITs common trend

Fixel’s strategy of investing in entrepreneurs from IITs seems to be a common trend even today (about seven years after Deorah’s book was first published). In fact, a majority of India’s 100 unicorns, most of which were crowned unicorns only over the last two years, have founders with an IIT background.

Data shared by analytics firm Tracxn Technologies with Moneycontrol show that 73 of India’s 100 unicorns have at least one from one of the country’s 23 IITs.

Break-Up Across IITs for Unicorn Companies R

The 73 unicorns have founders from seven of the 23 IITs, with IIT Delhi, leading the group, according to the data. About 21 unicorns have at least one founder who is an IIT Delhi alumni, followed by IIT Bombay, with 16, and IIT Kanpur, with 12. IIT Kharagpur, IIT Madras, IIT Roorkee and IIT Guwahati are the other four IITs behind the remaining 24 unicorns.

“I will not say that this (an entrepreneur coming from an IIT) is a parameter or the only parameter we look at,” said a venture capital investor, who has invested in a unicorn founded by an IIT alumnus, requesting anonymity.

“But it (an entrepreneur coming from an IIT) definitely adds some more merit to the candidate’s pitch. It’s not only about IITs per se, but also some other top colleges, like BITS,” the investor added.

Non-IITians are there, but still a long way to go

This ingrained bias for IITs could well be making it harder for non-IIT students to get investments for their ventures. Why is this bias? Consider this: every year, nearly 2 lakh students in India appear for the entrance exam, but only 10,000 students get selected to the country’s 23 IITs.

While the share of non-IIT founders has been going up, with BITS Pilani, for instance, gaining prominence, there is still a long way to go. As it happens, the founder of three Indian startups that became decacorns- Paytm’s Vijay Shekhar Sharma, Byju Raveendran of Byju’s and Sriharsha Majety of Swiggy -- are not from IITs.

That thing called IIT culture

Students and faculties at IITs believe it is the culture at the institutes that drives its students to become entrepreneurs over anything else.

“The one thing I have observed during my tenure at IIT Delhi is that students are not only good at innovation, but they are also very good at figuring out or analysing a situation. They do some metric research, they look at things, they assess the situation and then arrive at an innovation or a startup,” said a former senior professor, who did not wish to be named.

“And then you have a very good hostel culture, like-minded people, and some seniors around you who also want to do something of their own and innovate and solve problems for the world. All these help an aspiring entrepreneur in his journey,” he added.

The professor’s comments were corroborated by many students Moneycontrol spoke to. For instance, Advait Bhat, an IIT Bombay alumnus, said that his seniors always helped him in getting his ideas structured right.

“Most of my seniors were critical but that was constructive criticism. We (Bhat and his group) never felt like they (seniors) were discouraging in any manner, which helped us innovate better. And the criticism also helped address certain issues better,” Bhat said.

Another student of IIT Delhi, named Nishant Jindal, took it to LinkedIn saying that entrepreneurship in IIT Delhi is easier as an aspiring entrepreneur can leverage the vast IIT Delhi network.

“Even if startups fail, you can find a decent job in the industry for your subsistence. These perks are so powerful and underrated,” Jindal said in the post.

Challenge me, only then the best will come out

The culture of entrepreneurship and toughness is ingrained in the personalities of IITians and so most students are ready to take up new challenges every day, and this results in most becoming entrepreneurs, said Kalpen Shukla, President - IITD Alumni Association.

Shukla also said that the trend of IITians becoming successful entrepreneurs will further grow stronger.

“I personally feel that this trend will not only continue but become stronger and there are reasons for that. One, the startup ecosystem is now pretty well understood and this has got students tinkering with entrepreneurial ideas, which has led to a change in mindset and employment seekers are now becoming entrepreneurs,” said Shukla.

“There’s another reason. Currently, a good number of unicorns are coming out from deep tech areas. So, technology is the main driver. And IITs and IITians have a definite edge in these areas, and the understanding and perception built around this futuristic technology is definitely very in-depth, comparable to global standards. They are in a position to leverage their technology platforms as well as anybody else in the world,” Shukla added.

However, Shukla also said that he’s equally hopeful of non-IITians becoming successful entrepreneurs as long as they retain their passion and perseverance.

This is the second of a three-part series taking a closer look at the data of India's 100 unicorns.



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