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Flourishing digital economy helps startup ecosystem in India, says GlobalData

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Following the news that two Indian unicorns—Nykaa and PolicyBazaar—have filed for listing in Indian exchanges and two startups—BharatPe and OfBusiness—have joined the unicorn club;

Swati Verma, Associate Project Manager of Thematic Research at GlobalData, offers her view:

“India has become a digital-first economy due to rising smartphone penetration and affordable mobile Internet. Consumer-facing tech startups are the biggest beneficiaries of this trend. According to GlobalData, India has the third-largest technology unicorn ecosystem in the world, behind the US and China. The country has added 15 new unicorns in 2021.

“Several unicorns have entered late-stage funding rounds. This is when founders typically start weighing up their exit options. In July 2021, several Indian unicorns including Nykaa, Policybazaar, and Paytm have filed for IPOs while others such as Ola Cabs, Delhivery, and Lenskart plan IPOs in the next 18 months.

“Public listings give these companies access to huge quantities of capital, allowing them to diversify, acquire other startups, and expand into new geographies. Going public also strengthens brand recognition and helps attract more customers. Stakeholders also benefit, realizing significant returns on their investment.

“During the COVID-19 pandemic, investors have poured money into startups in themes such as e-commerce and digital payments. This will continue, and GlobalData expects more startups from these themes to join the unicorn club soon. The so-called ‘soonicorn club’ includes startups such as Practo (heathtech and medicine delivery), Rebel Foods (online restaurants), Cure.fit (fitness platform), Vedantu (edtech), and Licious (online meat delivery).

“As the digital economy in India continues to flourish, GlobalData expects the startup momentum to increase. More Indian startups will join the unicorn club, and several unicorns will go for IPO successfully.”