Govt tags Open as 100th unicorn
BENGALURU: India is inching closer to hit the unicorn century. Bengaluru-based neobank Open has entered the unicorn club after it raised $50 million led by IIFL along with existing investors Temasek, Tiger Global and 3one4 Capital. Last year, the SME-focused neo-banking platform raised $100 million led by Temasek with participation from Google and SBI Investment, one of Japan’s leading venture capital firms.
Though media reports said Open became India’s 100th unicorn, data for Venture Intelligence showed that India has 96 unicorns till date minting 14 new unicorns in the first five months of this calendar year. Some of the media reports have factored in Zoho and Zerodha as unicorns.
However, the two tech firms haven’t raised external capital till date. Minister of commerce and industry Piyush Goyal tweeted, “India hits a century in style! Bengaluru-based startup becomes country’s 100th Unicorn. India = Ideas + Innovation + Investments,” he said.
Anish Achuthan, co-founder & CEO of Open, said, the neobank didn’t raise money for capital, but was looking at a strategic partner to expand its lending portfolio to SMEs. The funding would be deployed to accelerate Open’s existing product lines Zwitch, its embedded finance platform, and BankingStack, enterprise banking solution for banks, drive global expansion and reach over 5 million customers within the next one year from the 2.3 million currently.
Open is targeting to disburse $1 billion in lending through the new suite of products on the platform in the next 12 months. Achuthan said the funds will also be used to strengthen the leadership team and expand its employee base from 500 to 1,000 within the year. India’s march to 100th unicorn has an interesting mix of enterprise, fintech, gaming, logistics, edtech, healthcare and consumer tech startups making it to the startup roster.
India’s Ethereum scaling platform Polygon has raised about $450 million recently that took its valuation to Bengaluru and US-based open-source engine Hasura has raised $100 million in a funding round led by Greenoaks that values the company at $1 billion. India’s startup ecosystem has added more firepower becoming the third-largest hub globally after the US and China. India has more than 61,400 startups.
However, regulatory bottlenecks have led to a flight of startups to Dubai, Singapore and the US in areas like crypto and gaming. Sharad Sharma, co-founder of iSPIRT (Indian Software Product Industry RoundTable), said its data indicates that 34 of the 90 unicorns are not domiciled in India.
“This is a big issue for the future health of the startup ecosystem. More active steps need to be taken to resolve pending items in the stay-in-India checklist. “ He said over the years, more and more startups have been focusing on the India market. “At present 58 of the 90 unicorns are exclusively India-focused.
Over the next few years, as the use of India Stack becomes more prevalent, the prominence of Bharat market-based startups will grow rapidly. A lot of new health-tech startup unicorns will emerge. They will join fintech startups to erode the dominance of e-commerce startups in the unicorn list right now,” Sharma added.