The financial health of India’s unicorns is under scrutiny more than ever. Whether they are real businesses making money is a question that sceptics have often raised. In the funding winter, when large sums of venture capital are hard to come by, their ability to sustain themselves through internal cash generation and meaningful revenue growth that justify their valuation has come under the spotlight.
Two important and basic financial metrics — revenue and profits — should give a sense of their prospects and challenges. Given the lag in financial reporting of private companies, the available information is a year old. The FY23 numbers will start trickling in from the third quarter. The financial numbers from the latest two financial years they reported — FY22 and FY21 — are collated. Several companies haven’t yet declared their numbers for the last financial year, or their numbers aren’t available for either year.
The unicorn financials in a nutshell:
At least 13 of India’s unicorns reported profits and 12 are on track to profitability. Financials of more than a dozen US headquartered Indian unicorns in SaaS and enterprise IT are not immediately available. The B2B tech unicorns have relatively stronger cash flows and several of them are likely to be profitable. In essence, roughly a third of India’s unicorns are in healthy financial shape.
For two dozen unicorns losses are more than revenue or spend double of what they earn. Then there is another set of 30 startups whose loss margins are in the range of 10% to 100%. Close to 14 months since FY22 ended and half a dozen India headquartered unicorns haven’t reported their financials yet. Most of them continue to make huge losses. On the whole, two-thirds of India’s unicorns would still need large amounts of capital to go forward.
Half a dozen unicorns saw their revenue decrease from the previous year. Among them, a few should stabilise and grow. But a subset of them, especially some of the earliest unicorns, may thin out in the next few years unless they manage to find new backers or buyers.
The list below has India’s unicorns in the descending order in terms of their revenue.
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