India’s Billion Dollar Start Up Club, The Unicorns
Budget hotel aggregator, Oyo Rooms is in talks with Japanese multinational telecommunications and internet corporation, SoftBank to raise about USD 300-500 million. If the deal goes through, the four-year-old company, which currently operates in more than 200 cities in India and Malaysia, could be catapulted into the prestigious Unicorn Club– startups that are valued at USD 1 billion or more..
While USA tops the list of global unicorns with 144 companies, China has 47 and India has 10. As more Indian startups eye entry into the prestigious club, we take a look at the current unicorns and how they have been performing in the recent past:
InMobi Technologies
Founders: Naveen Tiwari, Mohit Saxena, Amit Gupta and Abhay Singhal
Year: 2007
The first to enter the Unicorn Club in 2011, InMobi Technologies enables brands, publishers and developers to engage with global consumers through the mobile platform. The company, which completes a decade this year, was founded in 2007 under the name mKhoj, is backed by Soft Bank, Kleiner Perkins Caufield & Byers and Ram Shriram’s Sherpalo Ventures. In 2015, it was touted as taking on global giants Facebook and Google in the mobile advertising industry, however, the company ran into losses last year. Along with shutting down Miip, a discovery platform which it had unveiled in 2015, the company also faced the top level exits of its finance chief Manish Dugar and General Manager for India, Ankit Rawal, and laid off close to 100 people, as it strove to survive competition. The company is looking to invest up to USD 50 million in Indonesia over the next five years, to expand its base there.
Flipkart
Founders: Sachin Bansal and Binny Bansal
Year: 2007
Taking on Amazon, India’s largest e-commerce platform, Flipkart has had a rather roller coaster ride last year. The company entered into the USD 1 billion club in August 2012 after it raised USD 150 million from an investors group which included South African media company, Naspers Group, and San Francisco-based family office Iconiq Capital. This year saw a series of high profile exits which included shifting founder partner Sachin Bansal to the post of Executive Chairman, and moving Binny Bansal (COO and co-founder) as the new Chief Executive Officer. The e-commerce firm also laid off 700 employees, or over 3 percent of its workforce, as part of its focus to cut cost and compete with rivals like Amazon and Snapdeal. The company had lost its top position to its rival, Amazon, last year, and was devalued five times. While it shut down its grocery delivery division, Nearby, and in-app peer to peer chat service, Ping, the company acquired fashion e-tailer, Jabong, for USD 70 million. The year also saw the launch of private label, ‘Flipkart Smartbuy’. 2017 has also not started off on a good year for Flipkart, after Morgan Stanley recently marked down its valuation by 3 percent to USD 5.39 billion. The company is currently scouting for fresh financing.
Mu Sigma
Founder: Dhiraj Rajaram
Year: 2004
The data analytics and decision sciences company entered the Unicorn Club in 2013. In 2015, Mu Sigm clinched Microsoft as its first customer, and, over the years, gained quite a few high profile clients, including Dell and Walmart. The year 2016, however, did not prove to be a good one for the company as a legal tangle between its founder and his wife Ambiga Subramaniam, who he had appointed as the chief executive in February 2016, led to problems within the company and saw many high profile exits. Rajaram was also sued by one of its earliest backers, Patrick Ryan for grossly misleading his investment firm Walwrth Investments LLC by drastically playing down its prospects. In 2016, Rajan returned as the CEO and largest shareholder after he bought over his ex-wife’s shares.
Snapdeal
Founders: Rohit Bansal and Kunal Bahl
Year: 2010
The online marketplace Snapdeal entered the Unicorn Club in May 2014, less than five years after it was launched in 2010. In early 2016, Snapdeal raised USD 200 million from Canada’s Ontario Teachers’ Pension Plan and other investors, bringing its valuation to about USD 6.5 billion. However, the company has not had a good run in the recent past. At a time when the company was looking to raise funds to ward of global competition, Japanese Investor, SOftBank reported losses of USD 350 million on investments in Snapdeal and Ola, with media reports suggesting that Snapdeal was in talks with the investor to raise fresh funds at a much lower value – USD 3-4 billion, down from USD 6.5 billion. Snapdeal is also in the process of trimming its work force by 30 percent in the next two months. The company had been suffering losses which had doubled to more than Rs 2,960 crores for the financial year ended March 2016.
Paytm
Founder: Vijay Shekar Sharma
Year: 2001
The mobile payment and commerce company joined the Unicorn Club in 2015 after it received funding from Chinese e-commerce company Alibaba to the tune of USD 625 million. Paytm benefited the most out of the Government’s demonetization move, when in less than 24 hours after the government announced the move, the platform saw a 435 percent increase in its traffic. Everyone from the local vegetable vendor and kiraana store to huge supermarkets, started to accept Paytm as a mode of payment. In February 2017, the platform crossed 200 million registered users. Stepping up investments in the Indian market, Alibaba has launched the Paytm Mall, which takes on ecommerce companies such as Snapdeal, Flipkart and Amazon. The company, which wanted to launch its payment bank, however, lost out to Airtel. It is now looking at a launch by end March.
Zomato Media
Founders: Deepinder Goyal and Pankaj Chaddah
Year: 2008
Restaurant search and food delivery platform, Zomato, became a member of the Unicorn club in April 2015, with investments from companies including Info Edge, Sequoia Capital, and Vy Capital. While 2015 saw Zomato enter the US market with the acquisition of Urbanspoon and gain presence in 23 countries, 2016 was not a good one for the company. In January 2016, it had to shut down its online delivery services in Lucknow, Kochi, Indore and Coimbatore due to the small market size in these cities. As of mid-2016, the company was valued at just over USD 1 billion, however in mid-May HSBC’s brokerage arm cut the paper valuation of Zomato by 50 percent to USD 500 million. Zomato challenged the devaluation and denied charges that they had a low market share, stating that their existing investors were bullish about them. In 2017, Zomato has plans of launching ‘Cloud Kitchens’, where the company will provide small shared kitchen spaces to restaurant brands in a bid to help them cater to delivery locations in regions other than where they are located.
ShopClues
Founders: Radhika Aggarwal, Sandeep Aggarwal, Sanjay Sethi
Year: 2001
Online market place ShopClues entered the USD 1 billion club in January 2016, after it raised over USD 100 million in investments led by Singapore based GIC. In 2016, the company made a couple of acquisitions which included the Bengaluru based mobile payments startup, Momoe Technologies. Post demonetisation, the company reached out to offline merchants by launching Reach, which enables merchant who are not on ShopClues’ platform to make digital payments. Unlike other unicorns, ShopClues has had a rather decent run last year, and was not involved in any layoffs. The company has, till date, raised around USD 200 million from investors which included GIC, Tiger Global Management, Nexus Venture Partners and Helion Venture Partners.
Hike
Founder: Kavin Bharti Mittal
Year: 2012
In August 2016 Hike, a joint venture between Bharti Enterprises and SoftBank, which runs the messaging app, Hike Messanger, raised USD 175 million largely from Chinese Internet giant Tencent Holdings Ltd and Foxconn Technology Group of Taiwan, catapulting it into the Unicorn club, and bringing up its valuation to USD 1.4 billion. Taking on Snapchat, last year the homegrown chatting platform introduced new features such as Text Stories which allows users to share stories of their lives, a built-in camera and live filters.
Ola
Founder: Bhavish Aggarwal
Year: 2010
The ANI Technologies operated Ola joined the Unicorn Club in October 2014 with SoftBank Group Corp leading a USD 210 million funding round in the company. In January 2015, Ola bought Delhi based radio taxi service GCabs and renamed it Ola Fleet Technologies, and in November 2015, it raised USD 500 million at a valuation of about USD 5 billion. Ola also expanded its offerings and moved into new cities – offline booking, which allows users to hail a cab without internet connection, Ola Play, which is an in-car entertainment system. However, 2016 also saw the taxi aggregator last year spend most of its time and energy in warding off competition from Uber. In February, this year, Ola raised USD 330 million from SoftBank and two other investors, but its valuation saw a drop of 30 percent from the previous USD 5 billion to USD 3.5 billion.
Quikr
Founder: Pranay Chulet
Year: 2008
Online classifieds portal Quikr joined the elite club when it acquired real estate portal CommonFloor in January 2016. The company also made other acquisitions which included Indian Realty Exchange (IRX), a mobile-first aggregator of agents and real estate analytics platform RealtyCompass, in 2015. In 2016, the portal was one of the few Indian unicorns to post a higher valuation, after one of its investors, Swedish investment firm Kinnevik AB, valued its 18 percent stake in Quikr at USD 265 million, increasing the total valuation to USD 1.47 billion.
