india tech trends –volume ii
TRANSCRIPT
India Tech Trends – Volume IITech Unicorns Market Landscape
India Venture Growth Capital
January 2021
Copyright @ 2021 by Iron Pillar Holdings Ltd.
Iron Pillar is a mid-stage investment firm focused on technology companies built from India. The following analysis uses data from Iron Pillar’s proprietary database.
https://ironpillarfund.com/
EXECUTIVE SUMMARY
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1. India has built 59 tech Unicorns:
o Global cloud - built from India – 26
o B2C India – 25
o B2B India – 8
2. The first company to reach Unicorn status was Inmobi in 2011. 30 new Unicorns were created in 2019 and 2020. We believe India will have
150+ Unicorns by 2025
3. $280B+ value has been created by these Unicorns and $80B+ distributed to investors
4. Almost 50% of the Unicorns took <5 years from first funding to reach Unicorn status. >75% did it within 7.5 years
5. Companies building cloud software for global markets from India…
o get to Unicorn status with <60% of capital than those building B2C businesses for India
o create 2.4x more value for every $ raised compared to companies that are building for the Indian domestic market
o have 3x higher $1B+ exit rate compared to companies that are building for the Indian domestic market
o are increasingly being HQ-ed in Silicon Valley
THE PACE OF UNICORN CREATION FROM INDIA IS ACCELERATING
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Indian Tech Unicorns by year of achieving Unicorn status
We believe India will have 150+ Unicorns by 2025Source: Iron Pillar database. This list includes companies that were founded by Indian entrepreneurs and develop product from India but could be domiciled outside of India
1 1 1
4 43
2
17
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1
4
11
43
2
13 13
17Global cloud – built from IndiaB2C IndiaB2B India
$280B+ OF VALUE CREATED & $80B+ OF CASH DISTRIBUTED
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The next decade will see these numbers multiplying manyfold
1 2 3
7
1114
16
29
42
59
0
10
20
30
40
50
60
0
50
100
150
200
250
300
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Cum
ulat
ive
Coun
t
Cum
ulat
ive
Valu
atio
n ($
Billi
ons)
Aggregate Unicorn Valuation ($Billions) Number of Unicorns
Source: Iron Pillar database and Bain & Company India Venture Capital Report 2020
NOT ALL UNICORNS ARE CREATED IN THE CONSUMER TECH (B2C) SPACE
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Global cloud - Built from India Unicorns became the largest segment in 2020
Indian Tech Unicorns by area of business (total = 59)
B2C India25 (42%)
B2B India8 (14%)
Global Cloud - Built From India26 (44%)
Source: Iron Pillar database
COMPANIES ARE GETTING TO UNICORN STATUS FASTER
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30 out of 59 companies achieved Unicorn status within 5 years from first capital raise.Younger entrepreneurs are building larger companies, faster
Time required by Indian Tech startups to reach Unicorn status (total = 59)
30 (51%)
15 (25%)9 (15%)
5 (9%)
Less than 5 Years 5 Years - 7.5 Years 7.5 Years - 10 Years Greater than 10 Years
Source: Iron Pillar database and Tracxn
CAPITAL EFFICIENCY VARIES SIGNIFICANTLY DEPENDING ON BUSINESS FOCUS
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Average capital raised by businesses to reach Unicorn status
Global cloud - built from India Unicorns have been the most capital efficient
100
119
191
0
40
80
120
160
200
Global cloud - built from India B2B - India B2C - India
($M
illio
ns)
1.9x
Source: Iron Pillar database and Tracxn
CAPITAL EFFICIENCY VARIES SIGNIFICANTLY DEPENDING ON BUSINESS FOCUS
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Enterprise value divided by total capital raised
Global cloud – built from India Unicorns create 2.4x more enterprise value from every $ raised compared to Indian domestic market focused Unicorns
9.6x
4.1x 3.9x
Global cloud - built from India B2B India B2C India(26 Companies) (8 Companies) (25 Companies)
Source: Iron Pillar database and Tracxn
DILUTION FOR FOUNDERS AND VCS FOLLOW THE SAME PATTERN
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Average number of rounds raised by a $1B+ company
Global cloud - built from India Unicorns have been the least dilutive forfounders and VC investors
4.24.6
6.5
0
2
4
6
8
Global cloud - built from India B2B - India B2C - India
Source: Iron Pillar database and Tracxn
17
Exited Companies9
7
Exited Companies1
22
Exited Companies3
GLOBAL CLOUD - BUILT FROM INDIA UNICORNS HAVE THE HIGHEST EXIT RATE
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Global cloud - built from India Unicorns have higher exit rates due to easier access to NASDAQ and global M&A markets
Global cloud – built from India B2C India
B2B India
Exit Rate: 34.6% Exit Rate: 12.5% Exit Rate: 12.0%
(26 Companies) (8 Companies) (25 Companies)B2B India
Source: Iron Pillar database and Tracxn
INDIAN UNICORNS BY GEOGRAPHIC HQ
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Silicon Valley has become the preferred HQ for global cloud companies built from India
16 (27%)16 (27%)
15 (25%)5 (9%)
7 (12%)
Silicon Valley Bangalore Delhi NCR Mumbai Other Cities
Source: Iron Pillar database
APPENDIX 1: SUMMARY DATA
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No. Company Names Headquarters Founding Year Year of Unicorn Status Business Type1. Affle Mumbai 2005 2020 Global Cloud - From India
2. Appdynamics Silicon Valley, California 2008 2015 Global Cloud - From India
3. Apttus Silicon Valley, California 2006 2015 Global Cloud - From India
4. Automation Anywhere Silicon Valley, California 2003 2018 Global Cloud - From India
5. BigBasket Bangalore 2011 2019 B2C (India)
6. BillDesk Mumbai 2000 2018 B2B (India)
7. Blackbuck Bangalore 2014 2019 B2B (India)
8. Byjus Bangalore 2011 2017 B2C (India)
9. Cars24 Delhi NCR 2015 2020 B2C (India)
10. Citius Tech Princeton, NJ 2005 2019 Global Cloud - From India
11. Cohesity Silicon Valley, California 2013 2018 Global Cloud - From India
12. Dailyhunt Bangalore 2010 2020 B2C (India)
13. Delhivery Delhi NCR 2011 2019 B2B (India)
14. Dream11 Mumbai 2008 2019 B2C (India)
15. Druva Silicon Valley, California 2008 2019 Global Cloud - From India
16. Duck Creek Technologies Boston 2000 2020 Global Cloud - From India
17. Eightfold.ai Silicon Valley, California 2016 2020 Global Cloud - From India
18. FirstCry Pune 2010 2020 B2C (India)
19. Flipkart Bangalore 2007 2012 B2C (India)
20. Fresh works Silicon Valley, California 2010 2018 Global Cloud - From India
APPENDIX 1: SUMMARY DATA CONTINUED
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No. Company Names Headquarters Founding Year Year of Unicorn Status Business Type21. Gainsight Silicon Valley, California 2009 2020 Global Cloud - From India
22. Glance Bangalore 2018 2020 Global Cloud - From India
23. Headspin Silicon Valley, California 2015 2020 Global Cloud - From India
24. Highradius Houston, Texas 2006 2020 Global Cloud - From India
25. Hike Delhi NCR 2012 2016 B2C (India)
26. Icertis Bellevue, US 2009 2019 Global Cloud - From India
27. Indiamart Delhi NCR 1996 2019 B2B (India)
28. Infoedge Delhi NCR 1995 2016 B2C (India)
29. InMobi Bangalore 2007 2011 Global Cloud - From India
30. Lenskart Delhi NCR 2010 2019 B2C (India)
31. Makemytrip Delhi NCR 2000 2016 B2C (India)
32. MuSigma Bangalore 2004 2013 Global Cloud - From India
33. Netskope Silicon Valley, California 2012 2018 Global Cloud - From India
34. Nutanix Silicon Valley, California 2009 2014 Global Cloud - From India
35. Nykaa Mumbai 2012 2020 B2C (India)
36. Ola Bangalore 2010 2014 B2C (India)
37. Ola Electric Bangalore 2017 2019 B2C (India)
38. Oyo Delhi NCR 2013 2018 B2C (India)
39. Paytm Delhi NCR 2007 2015 B2C (India)
40. PayTM Mall Delhi NCR 2016 2018 B2C (India)
APPENDIX 1: SUMMARY DATA CONTINUED
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No. Company Names Headquarters Founding Year Year of Unicorn Status Business Type41. PhonePe Bangalore 2015 2018 B2C (India)
42. Pinelabs Delhi NCR 1998 2018 B2B (India)
43. PolicyBazaar Delhi NCR 2008 2018 B2C (India)
44. Postman Silicon Valley, California 2014 2020 Global Cloud - From India
45. Pubmatic Silicon Valley, California 2006 2020 Global Cloud - From India
46. Quikr Bangalore 2008 2014 B2C (India)
47. Razor Pay Bangalore 2013 2020 B2B (India)
48. Reliance Jio Mumbai 2007 2020 B2C (India)
49. Rivigo Delhi NCR 2013 2019 B2B (India)
50. Rubrik Silicon Valley, California 2014 2017 Global Cloud - From India
51. Snapdeal Delhi NCR 2010 2014 B2C (India)
52. Swiggy Bangalore 2014 2018 B2C (India)
53. Thoughtspot Silicon Valley, California 2012 2019 Global Cloud - From India
54. Udaan Bangalore 2016 2018 B2B (India)
55. Unacademy Bangalore 2015 2020 B2C (India)
56. Zenoti Bellevue, US 2010 2020 Global Cloud - From India
57. Zoho Chennai 1996 2019 Global Cloud - From India
58. Zomato Delhi NCR 2008 2018 B2C (India)
59. Zscaler Silicon Valley, California 2008 2015 Global Cloud - From India
This list includes companies that were founded by Indian entrepreneurs or develop product from India but could be domiciled out of India
APPENDIX 2: AUTHORS
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Anand Prasanna
Managing [email protected]
Mohanjit Jolly
Anand is the Managing Partner at Iron Pillar.
Before Iron Pillar, Anand led the Asia office for Morgan Creek inShanghai where he had a first-hand view of the rising tide oftechnology companies in China. Prior to Morgan Creek, Anand hadinvesting stints at Squadron Capital, Hong Kong and SequoiaCapital, Bangalore where he backed technology businesses andventure funds in India as well as South East Asia and Australia.Anand worked with McKinsey & Co. in their India office beforestarting his investing career.
Anand earned a PGDBM at Fore School of Management and a BBAat University of Kerala.
Mohanjit is a Partner at Iron Pillar.
Before Iron Pillar, Mohanjit served as a Partner at Draper FisherJurvetson for 9 years, establishing their India operations,overseeing the India venture portfolio and coordinating businessdevelopment efforts with Fortune 500 companies for DFJ’s globalportfolio. Prior to this, he was a Partner at Garage TechnologyVentures, a Silicon Valley seed stage VC firm. His early years inCalifornia and Boston saw him help launch ViaSpace, a technologyincubator in conjunction with Caltech and JPL and Intel Play, a JVbetween Mattel and Intel. He also worked at Itek Optical Systems,a manufacturer of high-resolution reconnaissance systems.
Mohanjit holds an MBA from The Anderson School at UCLA and aBS & MS, Aeronautics and Astronautics Engineering from MIT.
For further information or questions, please contact:
Shivam Agarwal
Investment [email protected]
Shivam is an Investment Analyst at Iron Pillar.
Prior to Iron Pillar, Shivam worked at BlackRock in their ClientPortfolio Solutions Group in the New York office. His work focusedon portfolio construction and asset allocation for institutionalclients, especially endowments and foundations.
Shivam graduated from Brown University with dual concentrationsin Applied Mathematics-Economics and Theatre Arts &Performance Studies.
Disclaimer
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This presentation, including, without limitation, to the statistical information herein, is provided for information purposes only. It relies on data from a wide range of sources, includingsecondary research, industry databases and conversations with leading tech investors and tech companies in India. We believe these sources to be reliable, but the data has not beenindependently verified. For this reason, we do not represent that the information in this presentation is accurate or complete. The information in this presentation should not be viewed astax, investment, legal or other advice, nor is it to be relied on in making an investment or other decision. This presentation should not be construed as a solicitation or any offer to buy or sellany securities. We disclaim any or all warranties, expressed or implied, with respect to this presentation.
Any trademarks or service marks used in this presentation are the marks of their respective owners who may not have contributed to the contents of this presentation. All rights in suchmarks are reserved by their respective owners.
Previously published thought leadership from Iron Pillar
1. Case for India-U.S. Enterprise SaaS
2. India Tech Trends: Volume I – Tech Unicorns Market Landscape
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