In 2020, the normal lives of all the people in the world came to a standstill for more than half of the year. While some countries came out of it in a jiffy and some unfortunate ones like India and US got rattled by a second wave. The world economy was undergoing unprecedented challenges with everything tumbling down and nothing working as per plans. One can say that Covid-19 has affected every walk of our life in one way or the other.
Even in these uncertain times, certain startups managed to become unicorns. Unicorns are those start ups that gain a value of $1 billion. 2020 is earmarked for Coronavirus and there is no dispute about that. This article explains the various changes that would have caused due the rise in the number of unicorns.
This would have come up as a very obvious reason. The pandemic has altered the very foundations of human life. Its impact was universal. It saw a paradigm shift in case of our preferences as well. So, it can be said that not only did the pandemic make a lot of changes, the people also changed a lot at the advent of the pandemic. This resulted in many growing companies to fall and many new ones to reach its zenith.
Education in times of Pandemic
Education is one sector that was altered in unrecognisable ways in 2020. This can be witnessed in the increase in the number of unicorns that this sector bore. Across the world, education shrunk into online platforms while opportunities became limitless.
While we acknowledge the digital gap that it exposed, we must also welcome the avenues it opened for people, especially with regard to distance education, accessibility of premium education etc.
One example for such a unicorn will be Unacademy. Launched as a YouTube channel in 2010, It was expanding slowly into the domain of online teaching before the pandemic itself. But we saw the demand for online classes skyrocket in 2020 and the firm was also able to rise up to the expectations of its users. In the same year, they announced their achievement of getting Unicorn status after the $150 million funding by SoftBank.
Changing Income Patterns
During the pandemic, the income levels of people dwindled. In India, 75 million people went into poverty. The people who had high paying jobs lost it, new employment was scarce. We had seen the stories of people who were professionals and yet had to go in for daily wage work or other manual work.
Even the government workers had to tighten their expenses due to heavy salary cuts. As far as the middle class was concerned, they had to take a step down when it came to their demands. Firms that understood and aligned with the financial situations of the people saw a rise in their status during this time.
One such startup is Cars24. The working middle class who were no longer able to afford cars for transportation had to look for more affordable options. This is when cars24 came as a saviour. They focused on the online transactions on pre-owned cars. This shift from new cars to used cars was a great opportunity for Cars24 and they used it well too. In 2020, with annual transactions going above two lakh units, it got the unicorn status with the $200 million investment made by Yuri Milner.
Search for More Income Sources
As mentioned earlier, incomes dwindled for most people in the world. This led people to look for more than one channel of income. Some started businesses, and many became content creators on various platforms etc. But most of them took to investing money in the stock market.
This became an intellectual exercise as well since it is a risky game and requires a lot of analysis. Despite all the risks involved, people who were hitherto critical about the stock market decided to try their luck this time.
An example for a startup that made the best out of this scenario is Zerodha. Launched in 2010 as an online trading startup, it was able to gain the likes of many traders before the pandemic itself. Today, Zerodha is the most valued and the most popular name in the online trading platforms. During the pandemic the monthly addition of users has been increasing by around two lakh users per month. They gained the unicorn status with a self assessed valuation at over $1 billion.
Realisation of Technological Gap
Pandemic exposed the sheer unpreparedness of even developed countries in handling the pandemic. Technological advance was not used in an optimal manner until then. Upon this realisation, one can say that 2020 became the era of technology where potentials of Artificial Intelligence, Data analytics etc were brought to the forefront. The situation demanded such a technical change. The startups who worked around these technologies saw themselves booming in 2020.
Glance is one such startup. It uses Artificial Intelligence to influence and leverage the contents on lock screens of Android phones. It is customised in severe languages as well. Having over 115 million active users, this startup has achieved the unicorn status in two years of its launch. In 2020, Glance got $145 million funding from Google and Mithril Capital which took it to the glory of unicorn status.
Zeal to Create a Contactless Environment
The spreading of Corona virus has completely altered the physicality of our surroundings. People try to reduce contact with people and things as much as possible. Currency became a very dangerous point of contact which can spread viruses like wildfire.
This led to the change in the case of digital payments. Experts note that, if not for the pandemic such a change would not have been possible in such a short time. Even the older generation who were stereotyped for resorting to traditional ways of payment migrated to online payment methods.
RazorPay is one of the most prominent online payment platforms that made the best use of the radical shift. Established in 2014, it aimed at simplifying online payments for small and medium enterprises. It continued to expand its domain to newer avenues and finally achieved unicorn status in 2020 with a $100 million funding. It continues to expand its business as their revenue increased 2.5 times than 2019.
Safe Ways of Shopping
Literally all forms of commerce where people came for business transactions were closed down during the lockdown. People, without much ado, went looking for better options on online platforms. Due to unlimited options, good offers and easy transactions online shopping became people’s favourite. Studies show that even after the pandemic subsided, it is unlikely that the demand in online shops would go down.
Nykaa is one such online shopping startup that achieved the unicorn status in 2020. It was launched in 2012 to cater the beauty products requirements. Nykaa’s growth was a surprise to those who thought it was an underdog in the e-commerce industry.
When the pandemic struck, Nykaa compensated for the customer’s inability to access physical shops. Today they have their own private labels for various products. Apart from the amount raised from the Bollywood film stars Alia Bhatt and Katrina Kaif, the startup achieved its unicorn status with 66.4 crore funding from Steadview Capital.
Other Startups that got the Unicorn Status in 2020
- Uber Freight
- VerSe Innovation
- Pine Labs
Indian startups that got unicorn status in 2021
- Digit insurance
- Urban Company
Unlike what was expected, we saw a surge in the number of startups that became unicorns in 2020. It must be noted that it was not just the changes made by the pandemic that helped them achieve it. It was only one among other factors. Their hard work, vision and adaptability cannot be forgotten. All these firms have been working for nearly a decade before it achieved the unicorn status. Their results are indeed a lesson for all the future entrepreneurs to learn from.
What is the meaning of Unicorn startup?
Unicorn is the term used to describe a startup company with a value of over $1 billion.
How many Unicorn startups are there in India?
There are about 100 unicorn startups in India in which 40 are technology startups that are unicorns.
Which is India's first unicorn startup?
InMobi was the first startup that became India's first unicorn in 2011 which was cofounded by Naveen Tewari in 2007.