It is becoming increasingly easy to launch a unicorn in India than in another country, concludes an industry expert.

Highlights:

• India is placed third in the global unicorn list with 21 of the world's 494 unicorns.

• The Indian start-up ecosystem continues to be the third largest in the world, with eight new additions to its unicorn club.

• Indian unicorns are expected to double the jobs they currently create by 2025.

• There are few areas where the Indian start-up ecosystem has some work to do to catch up with China and the US.

Amidst rising concerns about the Indian economy, there is one section of businesses that are galloping to glory and growth at a steady pace, India's tech unicorns. India's coveted start-up club of unicorns is growing faster than ever. In 2013, when Aileen Lee, Founder of Cowboy Ventures, coined the term unicorn to refer to technology start-ups with valuations over $1 billion, there were 39 unicorns in the United States. India had none. Since then, India has come a long way. Hurun Research Institute, in its recent inaugural report 'Hurun Global Unicorn List 2019', stated India is placed third in the global unicorn list with 21 of the world's 494 unicorns. China takes the top spot with 206, followed by the US with 203. But it is becoming increasingly easy to launch a unicorn in India than just about anywhere else. As we head towards 2020 in over a month's time, India's start-up ecosystem has surpassed all estimations by experts in the beginning of 2019. While the Indian start-up ecosystem continues to be the third largest in the world, it saw eight new additions to its constantly thriving unicorn club. There are multiple enablers propelling this remarkable growth of the ecosystem that are supporting the Indian start-ups as well as creating an environment conducive for continued innovation. Start-ups that joined the Unicorn club include Icertis, BigBasket, Rivigo, Delhivery, software firm Druva, Dream11, CitiusTech and Ola Electric.

A recent report by NASSCOM and Zinnov Management Consulting has brought out some interesting analysis of the Indian ecosystem and the growth of unicorns. A deeper analysis brings out some noteworthy facts about the Indian ecosystem and unicorns. 2019 as a year has witnessed the addition of two unicorns from Pune. This is the second year in a row where a start-up that has achieved a unicorn status is based outside start-up hotbeds like Bangalore, Delhi-NCR and Mumbai.

The average time that a start-up takes to become a Unicorn is six to eight years. This almost at par with the global average. Start-ups in China, the fastest growing start-up ecosystem, take an average time of four-six years to become a Unicorn. The average valuation per unicorn is approximately $3.2 billion, which is third best after China at $3.8 billion and the US at $3.5 billion.

These unicorns create 390,000-430,000 direct jobs and 1.4-1.6 million indirect jobs. These numbers have grown four times between 2014 and 2019. At this rate, Indian unicorns are expected to double the jobs they currently create by 2025.

There are few areas where the Indian start-up ecosystem has some work to do to catch up with China and the US. At current numbers, India's number of start-ups is just 10 per cent of the number of unicorns that China or the US have. The number of innovation clusters with a minimum of one unicorn is just five in India as compared to 18 and 24 in China and the US respectively.

Unlike 2018, this year, investments were better distributed across different round sizes. This led to an increase in the number of start-ups with total funding greater than $50 million, creating a strong pipeline of potential unicorns. The potential pipeline for unicorns also looks strong, with dozens of firms currently raising funds at unicorn valuations. These start-ups are emerging from well-heeled sectors such as e-commerce, fintech and logistics, as well as newer sectors such as content, social commerce and mobility. In addition to this, an ever-expanding pool of start-ups with resources that will enable them to gain market share ensures that India will see a rise in the number of unicorns.

Indian Unicorns largely are companies from gaming, supply chain and logistics, enterprise, e-mobility in addition to e-commerce and mobility. Start-ups in the unicorn pipeline represent about 13 industry sectors with nine out of these sectors having at least three start-ups in the pool. The NASSCOM report suggests that a growing pool of experienced operators and India's parallel ecosystem will enable continuous expansion of the pipeline. Given these numbers, India is all poised to have at least a 100+ start-ups by 2025.

Dr Param Shah is Director - UK, Federation of Indian Chambers of Commerce & Industry (FICCI).

Disclaimer: The views expressed herein constitute the sole prerogative of the author. They neither imply nor suggest the orientation, views, current thinking or position of FICCI. FICCI is not responsible for the accuracy of any of the information supplied by the author.