25 startups drop out of Hurun India Future Unicorn Index in 2024

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A record 25 upcoming unicorns dropped out of the list of Hurun India Future Unicorn Index 2024, reflecting an industry-wide funding winter that triggered a correction in the valuation of a host of startups.

Some of the prominent startups to have dropped out include Dunzo, Koo, Gaana, Bizongo, Rapido, Practo, WayCool, Paper Boat, Dotpe, to name a few.

Only three startups turned unicorns this year with a valuation of over $1 billion each, including quick commerce startup Zepto, fintech startup InCred Finance and logistics startup Porter, according to the list released on June 20.

SaaS and HR tech startup Darwinbox, which was a unicorn earlier, got demoted to a gazelle in 2024.

The list categorised prominent startups into “unicorns (start-ups founded after 2000 with a valuation of $1 billion), gazelles (start-ups that are most likely to turn unicorn in the next three years), and cheetahs (start-ups that could turn unicorn in the next five years)".

Around five gazelles and 20 cheetahs dropped out of the list this year.

Overall, the research found 152 future Indian unicorns from 31 cities. Most of them were set up in 2015, with the majority of them selling software and services, and only 18 percent selling physical products. Around 44 percent are selling to businesses, while 56 percent are consumer-facing, it said.

In terms of sectors, these future unicorns came from financial services, business management solutions, education and healthcare.

“There is an increasing focus on profitability and sustainable operating models, with 22 of the list entrants making profits in FY23. More than 1.5 lakh people are employed by Future Unicorns. These are green shoots of tangible impact metrics,” Rajesh Saluja, CEO and MD of ASK Private Wealth, said.

“The ASK Private Wealth Hurun India Future Unicorn Index provides essential insights into the current state and future prospects of India's startup ecosystem. Amid a funding winter, inflated pre-2021 valuations, and setbacks from companies like Byju's, the once golden startup ecosystem now faces a critical turning point. Despite 44 companies dropping out of the index over the past year, this year's index welcomes 38 new entrants,” said Anas Rahman Junaid, MD and chief researcher at Hurun India.

According to the research, some of the notable promotions in the index include online travel aggregator ixigo, a former cheetah, that went public with a 48 percent premium. “In 2022, ixigo was predicted to become a unicorn within five years, and it has now leaped directly to an IPO, bypassing the gazelle status. With a market cap of Rs 6,000 crore ($700 million), ixigo is on track for a billion-dollar valuation. Around 10 cheetahs were promoted to gazelles," it said.

Aerospace stood out as one of the hottest sectors to watch out for. AI startups in the index have received a combined $1.6 billion in funding, while aerospace startups have garnered $160 million, and EV companies have attracted $1.2 billion. “The significant gap in funding for aerospace compared to other sectors highlights its enormous growth potential,” Junaid said.

Top investors

Peak XV Partners (formerly Sequoia Capital India & SEA) continues to remain the top venture capital firm, with 47 portfolio startups that are inching towards becoming unicorns. Some of the key investments include Turtlemint, Classplus and CleverTap.

Second to Peak XV is Accel that 25 investments that are poised to become the next generation of unicorns. Their portfolio features a diverse range of interesting companies, including Money View, Ninjacart, and Stanza Living.

Tiger Global Management ranked third. It has made investments in 21 Gazelles and Cheetahs. Their portfolio showcases a diverse range of interesting companies, including Ather Energy, Captain Fresh and Classplus.