The silver lining of 2020: A whiff of positivity from startup world

Note to readers: Hello world is a program developers run to check if a newly installed programming language is working alright. Startups and tech companies are continuously launching new software to run the real world. This column will attempt to be the "Hello World" for the real world. 

This year has been terrible. No doubt. The pandemic, lockdown, and the economic crash that ensued have left many people struggling — this includes startups that have had to shut or cut costs drastically. Having had to shut my first startup, I know how devastating this can be even under normal circumstances. On the whole, I’m set for this year to end on a somber note. But the optimist in me has found some cheery data in an otherwise dreary world.

In 2020, despite the pandemic slowing down venture capital investments, seven new companies entered the Unicorn club (startups valued at over $1 billion). This includes Zenoti, a SaaS company from Hyderabad; Cars24, a used cars platform from Gurgaon; RazorPay, a payments company from Bengaluru; education technology company Unacademy; API development platform Postman; E-commerce firm Nykaa, and payments company Pine Labs.

Despite the pandemic, Zenoti, which sells software to manage spas and salons, raised $160 million at a valuation of $1 billion. In peak pandemic October, Razorpay raised $100 million and became a Unicorn. Payments company PhonePe has raised $700 million at a post-money valuation of $5.5 billion. Turns out that after early panic and uncertainty, investors have decided to double down on their top bets from India. Combined, these companies are valued at about $15 billion in a short span of time. Universe. Dent. You get the drift.

But that’s not all. The pace of startups becoming unicorns have improved. According to The Hurun Research Institute, “the average age of Indian unicorns is 7 years, of which 2 are less than four years old.” For instance, Udaan, a company founded by former Flipkart executives, became a unicorn in less than two years. Note that I’m only using fundraising as a mile marker and not counting it as success in itself.

Prolific angel investor and the India managing director of Sequoia Capital, Rajan Anandan reckons that in the next five years, there will be 100 odd unicorns in India. Why? India has over 500 million connected users now, making it the second-largest smartphone market in the world. Moreover, entrepreneurs now come with a lot more exposure to product building and have a complete ecosystem to seek support from. Venture capital is also growing in India.

While several of these startups address the Indian market, a set of unicorns will also build products from India for the world. Zenoti, which has a global customer base; and Postman, which has over 8 million developers using their platform, are great examples of startups built from India for the world.

Another good news that flew under the radar earlier this month was the public listing of ad tech company Pubmatic. The Pune and California based company went public on the Nasdaq this month and was valued at over $1.4 billion on the first day of trading. This again is great news for Indian startups — employees, founders, and investors — that have traditionally struggled to find an exit. These are good signals that lead me to believe that 2021 will be a much happier year for Indian startups. After all, what are we if not hopeful?