Nearly 40 tech startups that have become unicorns in the last few years will reach $100 million by FY2022, thanks to venture capital (VC) funds that have invested $143 billion over the past 15 years (CY08-CY22). surpassed the revenue of
According to a report by management consulting firm RedSeer Strategy Consultants, unicorns, especially in verticals such as fintech, e-commerce and logistics, exceeded $100 million in revenue as of FY22. What took him 18 years to reach this earnings milestone in 2000 has been cut to 5 years in 2017.
These startups have taken five to 12 years to reach revenue, but as the ecosystem has matured over the past decade, the time to reach scale has dropped significantly, RedSeer said. increase.
According to RedSeer’s estimates, the $143 billion in funding VCs have put into the Indian startup ecosystem is now valued at $804 billion. At current valuations, this equates to approximately a 4.5x return on a VC investment.
“Venture capital has played a central role in helping startups reach revenue milestones. In addition to capital, investors add tremendous value to the companies they fund. , the governance, financial prudence, and network knowledge brought by VCs are invaluable to startups.” report added.
However, not all startups survive, scale and generate millions of dollars in revenue.
RedSeer estimates that there are about 12,000 start-ups in India, ranging from start-ups (less than $10 million in revenue), growth stage ($10-100 million in revenue) and large scale start-ups ($100-100 million). $1 billion), revenue categories vary.
Of these, 95% are in the emerging category, 3-4% are in the growth stage, and less than 0.5% are large companies with annual revenues exceeding $100 million.
The consultancy said many start-ups face scaling challenges in the process of growth. Many belong to niche industries that limit the overall market they can serve, while others struggle with product market fit and unsustainable growth.
“Finally, the challenges that sink startups stem from poor profitability and organizational, governance, and operational bottlenecks,” RedSeer added in the report.