Indian Success Stories: Unicorn Exits in the Past Decade

India’s startup ecosystem has undergone a dramatic transformation over the past decade. Once considered a nascent sector, it has now become a global powerhouse, producing some of the world’s most successful unicorns—privately-held startups valued at $1 billion or more. The rise of these unicorns is not only a testament to India’s entrepreneurial spirit but also to the increasing investor confidence in Indian innovation.

In this blog, we will explore some of the most notable unicorn exits in India in the past decade, understand the factors behind their success, and examine how the exit timelines for Indian startups have evolved in response to changing market conditions and investment patterns.

What is a Unicorn and How Do Exits Work in the Indian Ecosystem?

A unicorn is a startup that reaches a valuation of $1 billion or more before going public or getting acquired. Exits, which refer to the event where founders, employees, or investors liquidate their holdings, are a crucial part of a unicorn’s lifecycle. These exits can occur through various channels, including:

• Acquisitions by larger companies
• Initial Public Offerings (IPOs) where the company lists on the stock exchange
• Secondary market sales where private equity or venture capital investors sell their stakes to other investors

In India, the path to exit for unicorns has been evolving. Traditionally, exits were slower and less frequent. However, as the startup ecosystem matured, exits became faster and more lucrative for founders and investors alike.

Key Indian Unicorn Exits in the Past Decade

India has seen some major unicorn exits in the past decade, with several startups either going public through IPOs or getting acquired by global giants. Here are a few notable ones:

1. Flipkart: A $16 Billion Exit to Walmart (2018)

Flipkart, India’s first unicorn, marked a watershed moment in the Indian startup ecosystem when it was acquired by Walmart in 2018 for $16 billion. The deal remains one of the largest exit events in the history of Indian e-commerce.

• The Path to Exit: Flipkart, founded in 2007 by Sachin and Binny Bansal, grew rapidly to become the largest e-commerce platform in India. With early investments from Tiger Global, Accel, and Matrix Partners, Flipkart demonstrated immense growth potential, eventually attracting global giants like Walmart, which sought to tap into India’s burgeoning e-commerce market.
• Impact: Flipkart’s exit marked a turning point for Indian startups, demonstrating that the country could produce tech companies capable of reaching massive global valuations. The acquisition also signaled growing interest from foreign investors in India’s startup ecosystem.

2. Zomato: IPO Success (2021)

Zomato, India’s largest food delivery platform, achieved a landmark exit through its initial public offering (IPO) in 2021, where it was valued at over $12 billion. This exit is significant because it highlights the growing trend of unicorns in India choosing to go public rather than being acquired.

• The Path to Exit: Founded in 2008 by Deepinder Goyal and Pankaj Chaddah, Zomato expanded from a restaurant discovery platform to a food delivery service. It raised capital from prominent investors such as Ant Financial, Sequoia Capital, and Info Edge. Zomato’s IPO was a success, oversubscribed multiple times, and allowed it to raise over $1 billion in public funds.
• Impact: Zomato’s IPO was a major milestone for the Indian startup ecosystem, reflecting increasing investor appetite for tech-driven businesses in India. It set the stage for other unicorns, including Paytm and Nykaa, to consider IPOs as a viable exit strategy.

3. Paytm: India’s Largest IPO (2021)

Paytm, India’s leading digital payments company, also took the IPO route for its exit, raising $2.5 billion in one of the largest IPOs in India’s history. Although Paytm’s post-IPO performance has been volatile, the event itself highlighted the increasing maturity of the Indian startup ecosystem and the growing trust in fintech companies.

• The Path to Exit: Paytm, founded in 2010 by Vijay Shekhar Sharma, started as a mobile recharging platform and evolved into a fintech giant offering digital wallets, loans, and financial services. Paytm’s IPO was backed by SoftBank, Alibaba, and other investors, and it aimed to tap into the growing digital payments market in India.
• Impact: Paytm’s IPO made headlines globally and signaled that Indian unicorns in the fintech sector had the potential to attract large-scale investments. While the company faced post-IPO challenges, the exit strategy proved to be a key liquidity event for investors.

4. PolicyBazaar: IPO Success (2021)

PolicyBazaar, an online insurance aggregator, went public in November 2021 with an IPO that raised $1.3 billion. The listing was considered a major success for India’s insurtech space.

• The Path to Exit: Founded in 2008 by Yashish Dahiya and Alok Bansal, PolicyBazaar built a platform that allows customers to compare and purchase insurance products. Over the years, the company attracted significant investments from firms such as SoftBank, Tiger Global, and SVF India, which helped it scale across the country.
• Impact: PolicyBazaar’s successful IPO further solidified the rise of tech-driven businesses in India’s financial services sector. Its successful public listing provided another model for startups looking to exit through the stock market, particularly those in the insurtech and fintech sectors.

5. BYJU’S: Strategic Acquisition of Akash Educational Services (2021)

In a notable acquisition, BYJU’S, India’s leading ed-tech company, acquired Akash Educational Services in 2021 for approximately $1 billion. This was one of the largest acquisitions in the ed-tech sector.

• The Path to Exit: BYJU’S, founded in 2011 by Byju Raveendran, has rapidly grown into one of the world’s most valuable ed-tech startups. The acquisition of Akash, which operates coaching centers for medical and engineering entrance exams, was part of BYJU’S strategy to expand its offline presence and diversify its offerings.
• Impact: This exit demonstrates the increasing trend of acquisitions in India’s unicorn ecosystem, especially as larger players seek to consolidate their market position. It highlights how fast-growing startups like BYJU’S can drive consolidation and create value through strategic acquisitions.

3. Evolving Exit Timelines for Indian Startups

The path to exit for Indian unicorns has evolved significantly over the past decade. Early on, exits were typically slower and often occurred through acquisitions by large global companies. However, in recent years, IPO exits have become more common, signaling a maturing market for public listings.

Shortening Exit Timelines

Research indicates that Indian unicorns are exiting faster compared to previous years. The average time for an Indian startup to reach an exit has shortened significantly, driven by a number of factors:

• Favorable Market Conditions: With the rise of digital services, fintech, and other tech-driven sectors, the Indian market has become more attractive to both public market investors and acquirers. This has sped up the exit process.
• Increased Investor Confidence: As the Indian startup ecosystem matures, global investors are more confident in funding businesses that are likely to deliver strong exits. Consequently, unicorns are seeing quicker exit opportunities.
• Increased IPO Activity: The 2021 IPO boom saw multiple Indian unicorns go public, including Zomato, Paytm, and PolicyBazaar, providing an exit route that was previously less common.

While the acceleration of exits is a positive sign for the Indian startup ecosystem, it also brings challenges. Shorter timelines require startups to scale quickly and execute their business plans effectively, sometimes under pressure to achieve profitability before a public listing or acquisition.

4. Conclusion

The Indian startup ecosystem has witnessed remarkable growth over the past decade, with several unicorns reaching significant exits through acquisitions and IPOs. These exits not only signal the maturity of the Indian market but also demonstrate the potential of Indian startups to achieve global success.

For investors, understanding the evolving landscape of exit opportunities, particularly in a growing and dynamic market like India, is crucial. The shortening exit timelines, driven by favorable market conditions and investor confidence, offer exciting prospects for future unicorns. However, investors must also be mindful of the risks associated with shorter exit horizons and ensure that portfolio companies have the operational and strategic resources necessary for sustained growth.

As India continues to produce high-value unicorns and attracts global investors, the next decade will likely witness even more groundbreaking exits, contributing to the growth of the global startup ecosystem.

FAQs

1. How long does it typically take for an Indian startup to exit?
The average time for an Indian startup to exit has been shortening, with some exits occurring within 5-7 years due to favorable market conditions and increased investor confidence.

2. What are the most common exit strategies for Indian unicorns?
The most common exit strategies for Indian unicorns include IPOs and acquisitions by global corporations. The IPO route has become more prevalent in recent years.

3. What sectors have seen the most successful exits for unicorns in India?
Sectors like e-commerce, fintech, ed-tech, and healthcare have seen some of the most successful exits in India, with companies like Flipkart, Paytm, Zomato, and BYJU'S leading the way.

4. Why is the IPO route becoming more common for unicorn exits in India?
The IPO route is becoming more common due to India’s growing investor appetite for tech-driven businesses, as well as favorable market conditions that support strong valuations.

5. What are the challenges of shorter exit timelines for startups in India?
Shorter exit timelines put pressure on startups to scale quickly and achieve profitability before a public listing or acquisition, which can sometimes result in businesses compromising on long-term sustainability for short-term growth.