- ‘Open’, a Neobanking platform became the 100th Indian company to enter the Unicorn club
- It is an ode to PM Modi’s efforts towards making people job providers, rather than job seekers
- In the post-pandemic world order, India has emerged as a reliable destination for investors looking to gain interest on their money
During the UPA2 era, the term Policy paralysis was used to define the dilapidated state of India’s business environment. Fast forward to 2022, not many even remember this term as the animal spirit of businesses has registered a huge upsurge. Nothing manifests it more than the skyrocketing pace with which Indian startups are entering the Unicorn club.
Open becomes 100th Unicorn
With its latest round of funding, ‘Open’ has become the 100th Indian company to enter the Unicorn club. For a basic understanding, unicorns are startups valued at over US$1 billion. Unicorns represent the level of investments that are being funnelled into startups. ‘Open’, a neobanking platform for Small and Medium Enterprises (SME) received $50 million, majorly from India Infoline Limited (IIFL). Other investors like Tiger Global, Temasek and 3one4 Capital also participated in the process.
Remarkably, it was a Series D round of funding. Series D funding is mainly led by Venture Capitalists. Venture Capitals are very shrewd investors who only invest in companies whom they deem fit (after thorough research) for long term growth. This is the reason why very few startups are able to achieve this feat. Open’s credibility in the sector can be gauged from the fact that in its last round of funding, it received investments from Google, Temasek, Visa, and Japan’s SoftBank Investments.
With Open’s entry into the grand club, the total valuation of 100 Unicorn companies is now standing at $333 billion.
Read more: FinTech startups – The sector that is producing Indian Unicorns on an assembly line
PM Modi’s thrust towards promoting business
The fact that India is now standing only behind the US and China in terms of the number of Unicorns is an ode to PM Modi’s thrust on making people job providers rather than job seekers. Over the last 8 years, the business environment in India has improved drastically. PM Modi’s emphasis on making India Aatmanirbhar in the wake of declining neoliberalism has resulted in the launching of initiatives like Stand-up India and Start-up India.
The improvement in law and order, as well as rapid infrastructural investment led by the Modi government, resulted in a significant rise in India’s Ease of Doing Business rankings (now defunct). The ranking inspired confidence in foreign investors and they started to believe in India’s growth story.
Along with FDI and FII investments, the country also witnessed a rise in the funding of its startups. As reported by the TFI, in 2021 alone, Indian startups received a record investment of nearly $ 36 billion in privately held companies in the year 2021. The seed funding in nearly 396 deals contributed to $705.86 million while about 166 investments in series A amounted to about $1.67 billion.
Read more: 2021 showered a whopping $36 billion on Indian startups
Businesses to help businesses
Earlier, Indian companies were mainly built on providing services to customers only. These companies are called Business-to-Customer (B2C) companies. There was no concept of a sector which could work as a feeder service to these B2C companies. The rising number of B2C companies fuelled the rise of companies which needed to feed the existing businesses’ needs.
Read more: Zeta, Pharmeasy, BharatPe and more: 2021 belonged to Indian startups
This gave rise to the onset of Business-to-Business (B2B) companies in India. B2B was slow to garner pace as B2C had itself not reached its full potential. As they registered a skyrocketing rise, B2B also started to get along. The burgeoning business environment can be gauged from the fact that out of 15 unicorns registered this year, 13 are B2B. Now, B2B and B2C are competing with each other.
Businesses all around the world are looking for a reliable country to invest in as the US is in decline and China has lost its credibility. India is taking up the vacated space at a ferocious pace and rapid acceleration in Unicorns’ registration is evidence of that.
