Tech Unicorns & Future IPO Companies for Millennial-23.12.2019

We all must have heard the names of Indian start-ups like OLA, Swiggy, Zomato, Paytm, Byjus. The millennial must have booked a ride with OLA, ordered food from Swiggy or Zomato, paid utility bills with Paytm or have enrolled with Byjus for learning various subjects. But, do we know, when these start-ups were formed, how much revenue they are clocking, how much profit or loss these companies are making, or what is the valuation of these companies? or are these companies have achieved the status of Unicorn? Well, let us first understand the meaning of the word, Unicorn. 

A unicorn is a privately held startup company valued at over $1 billion. The term was coined in 2013 by venture capitalist Aileen Lee, choosing the mythical animal to represent the statistical rarity of such successful ventures

Below is the information collected from various sources regarding Indian unicorns performances and valuations.

 

Company Year  Revenue(Cr) P&L(Cr) Valuation Founder
OLA 2010 2542 (2592) $6 Billion Bhavish Aggarwal
Zomato 2008 1442 (2026) $2 Billion  Deepinder Goyal, and Pankaj Chaddah
Swiggy 2014 1297 (2364) $3.33 Billion  Koramangala, Bengaluru’s startup hub.
Paytm 2010 3300  (4000) $16 Billion Vijay Shekhar
Byjus 2011 1430 20 &5 Billion  Byju Raveendran

Note: Revenue and P&L shown above are for FY18-19.

From the above data, it is clear that Paytm is the most valued unicorn in India. Its valuation is whopping Rs. 1.14 Lakh Crores in the latest funding round completed in Nov 2019.

The Byju’s is the only unicorn in India who has turned profitable and the rest all are making losses.

Zomato and Swiggy, are making ~2x losses in size with revenue. However, management is confident this year to reduce losses.

OLA is planning for IPO in the next 2 years, so they are trying different ways of reducing expenses and make it profitable.

The largest expense for all these unicorns is ” Advertisements“, as these companies are trying to capture market share by offering freebies. As per report, Swiggy and Zomato, make a loss of Rs.20-30 per order they serve. However, once these companies acquired substantial footfalls, getting good profits growth would not be an issue.

PE/Venture investors are now cautioned with the painful experience of Softbank with recent “We Work”, the largest co-Office and Workstation sharing company in the world, where they lost close to $4 Billion dollars due to the fear of expensive valuation and no sign of profitability in near future and have given clear instructions to all companies where they have done investment to focus on profitability to avoid such incidents in the future.

The next 5-10 years will be challenging for these unicorns to make their mark in this world. Till now all are making a good fortune with huge investment flowing in. From here on, they need to work really hard and make the company profitable so that they can bring IPO and give investors a good return on their investments.