India Tech Trends – Volume I

Tech Unicorns Market Landscape

November 2019

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/

Copyright @ 2019 by Iron Pillar Holdings Ltd.

PREFACE
We started Iron Pillar at the end of 2015 with a vision to build a specialized Indian mid-stage tech investment firm, which would work closely
with the most ambitious and long-term focused tech founders, who could benefit from our experience, networks and relationships in India,
US and China.

During our early days, one of the key questions we were asked was “Can Indian tech companies scale?” While we could point to favourable
macro indicators such as exceptional demographics and strong GDP / investment growth and make comparisons with similar trends in US
and China, the answer we gave was a prediction rather than an emphatic “yes” backed up by substantial data. In fact, India had just 7
Unicorns in 2016, created over a decade+ of active tech investing with relatively low realized venture returns. The environment deteriorated
in 2016-2017 with funding drying up significantly for Indian tech companies.

Enter 2018 which proved a landmark year. Even optimists such as ourselves were stunned by the resilience of Indian tech founders and the
incredible scale they managed to achieve, which would have been hard to predict just 2-3 years earlier. Factors such as cheap data and
handsets, which were not present in 2015, became commonplace by 2018 and helped to accelerate this transformation. The SaaS explosion
made building global tech companies from India not only possible but moreover to scale at breath-taking velocity. However, the greatest
progress was evidenced in the quality of talent.

For the first time, creating or working for a startup has become the #1 choice for the brightest engineering graduates in India. For the first
time, we saw a large number of senior tech and non-tech executives leave cushy jobs to join a startup or start one themselves. For the first
time, we saw employees of scaled startups leaving to start their own ventures. Startup teams had depth like never before. We started seeing
a ‘reverse brain drain’ from Silicon Valley. Finally, we are now seeing the virtuous cycle of repeat entrepreneurs, having scaled and sold their
earlier startup(s) / having learned from previous failed venture(s), looking to hyperscale bigger, bolder and wiser new ventures.

Recently, one of our Fund I investors asked for a report which illustrates the scale of these large new-age tech companies built from India. To
our surprise, there was no data or meaningful analysis available in the public domain so took it upon ourselves to communicate at least some
parts of this exciting growth story.

Anand Prasanna
Managing Partner

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EXECUTIVE SUMMARY

1. India currently has 30 tech Unicorns, 21 of them were created in 2018 and 2019

2. $100 billion+ value has already been created by these Unicorns

3. E-commerce, fintech and SaaS represent the majority of the Unicorns

4. Almost a quarter of the Indian Unicorns are building B2B products for the world

5. Almost 60% of the Unicorns took less than 5 years from first funding to Unicorn
status. More than 75% of them did it within 7.5 years

6. Companies building B2B products for the world from India get to Unicorn status with
less than 50% of capital than companies building B2C products for India

7. While there is a lot of upcoming and promising new VCs, 8 early stage VCs dominate as
the most prolific Unicorn builders

8. Bangalore and Delhi house >75% of Indian Unicorns

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THE PACE OF UNICORN BUILDING IS ACCELERATING
Series 1
11

Indian Tech Unicorns by year of creation (Total=30) 10

1 1 1 1 1 1

2011 2012 2013 2014 2015 2016 2017 2018 YTD 2019

We believe India will have 75 to 100 Unicorns by 2025

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$100 BILLION+ OF VALUE CREATION AND $20 BILLION+ OF CASH DISTRIBUTIONS
TO INVESTORS HAS ALREADY OCCURRED

$ Bn #

120 35

30
100 30

25
80
20
20
60
15
40
9 10
8
7
6
20 5
3
2
1
0 0
2011 2012 2013 2014 2015 2016 2017 2018 YTD 2019
Aggregate Unicorn Valuation ($ Bn) Active Unicorns

Next decade will see these numbers multiplying many fold

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UNICORNS ARE GETTING CREATED IN A DIVERSE ARRAY OF MARKET SEGMENTS

1 1 E-Commerce FinTech
1 6
1
1 SaaS Logistics Technology
1
Transport Technology Food Tech
1
1 AdTech Data Analytics
5
2 Online Classifieds Social Networks
2 EdTech Online Travel
3 4
Mobile Gaming RPA

This is a strong testament to the depth of the Indian tech market and
entrepreneurial talent pool
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NOT ALL UNICORNS ARE CREATED IN THE CONSUMER TECH SPACE

Indian Tech Unicorns by area of business (Total=30)

17 B2C - India
6 B2B - India
B2B Global - Built from India

7 ‘Built from India’ Unicorns are focused on building B2B products for the
world
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COMPANIES ARE GETTING TO UNICORN STATUS FASTER

Indian Tech Unicorns by time taken from first

1 capital raise to Unicorn (Total=30)
5

17 < 5 years
7 5 - 7.5 years
7.5 - 10 years
> 10 years

17 out of 30 companies achieved Unicorn status within 5 years from first

capital raise. Younger entrepreneurs are building larger companies, faster
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 CAPITAL EFFICIENCY VARIES SIGNIFICANTLY DEPENDING ON BUSINESS FOCUS

$ million
Average capital raised by businesses to reach Unicorn status
250

$206
200

150 $131

$97
100

50

0
B2B Global - Built from India B2B - India B2C - India

B2B Global ‘Built from India’ businesses have been the most capital efficient
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EARLY STAGE VC SUCCESS IN INDIA IS CONCENTRATED - ONLY 8 VCs INVESTED IN
MORE THAN ONE UNICORN AS FIRST OR SECOND INSTITUTIONAL INVESTOR

# of Unicorns where an early stage VC was the first or second institutional investor

VC 1 6

VC 2 5

VC 3 5

VC 4 4

VC 5 3

VC 6 3

VC 7 2

VC 8 2

0 1 2 3 4 5 6 7
These 8 VCs were the first or second investor in 78% of the Unicorns who
raised VC capital (27 of 30 Unicorns raised VC capital)
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 A DEEP CAPITAL POOL IS AVAILABLE TO BACK LARGE INDIAN TECH COMPANIES

# of deals by investors in $1 billion or later rounds (not an exhaustive list)

SoftBank 11
Tencent 7
Alibaba 5
DST Global 4
Premji Invest 4
Steadview Capital 4
Naspers 3
Temasek 3
Tiger Global 3
GIC 2
Goldman Sachs 2
Hillhouse 2
Qatar Investment Authority 2
Warburg Pincus 2
Berkshire Hathaway 1

Indian tech Unicorns are no longer dependent on a handful of late-stage

investors to scale fast
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INDIAN TECH UNICORNS BY GEOGRAPHIC HQ

3 Bangalore
12
Delhi NCR
Mumbai
Other Cities
11

Bangalore and Delhi NCR offer the most comprehensive ecosystems for large
tech companies to thrive
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 APPENDIX 1: INDIAN TECH UNICORNS - SUMMARY DATA
Company Name City Year of Formation Year of Unicorn Status Business Type Sector
1 Automation Anywhere Vadodara 2003 2018 B2B (Global) RPA
2 BigBasket Bangalore 2011 2019 B2C (India) E-commerce
3 BillDesk Mumbai 2000 2018 B2B (India) Fintech
4 Blackbuck Bangalore 2014 2019 B2B (India) Logistics tech
5 Byjus Bangalore 2011 2017 B2C (India) Edtech
6 Citius Tech Mumbai 2005 2019 B2B (Global) SaaS
7 Delhivery Delhi NCR 2011 2019 B2B (India) Logistics tech
8 Dream11 Mumbai 2008 2019 B2C (India) Mobile Gaming
9 Druva Pune 2008 2019 B2B (Global) SaaS
10 Flipkart Bangalore 2007 2012 B2C (India) E-commerce
11 Fresh works Chennai 2010 2018 B2B (Global) SaaS
12 Hike Delhi NCR 2012 2016 B2C (India) Social Networking
13 Icertis Pune 2009 2019 B2B (Global) SaaS
14 InMobi Bangalore 2007 2011 B2B (Global) Adtech
15 Lenskart Delhi NCR 2010 2019 B2C (India) E-commerce
16 MuSigma Bangalore 2004 2013 B2B (Global) Data Analytics
17 Ola Bangalore 2010 2014 B2C (India) Transport tech
18 Ola Electric Bangalore 2017 2019 B2C (India) Transport tech
19 Oyo Delhi NCR 2013 2018 B2C (India) Online travel
20 Paytm Delhi NCR 2007 2015 B2C (India) Fintech
21 PayTM Mall Delhi NCR 2016 2018 B2C (India) E-commerce
22 PhonePe Bangalore 2015 2018 B2C (India) Fintech
23 Pinelabs Delhi NCR 1998 2018 B2B (India) Fintech
24 PolicyBazaar Delhi NCR 2008 2018 B2C (India) Fintech
25 Quikr Bangalore 2008 2014 B2C (India) Online classifieds
26 Rivigo Delhi NCR 2013 2019 B2B (India) Logistics tech
27 Snapdeal Delhi NCR 2010 2014 B2C (India) E-commerce
28 Swiggy Bangalore 2014 2018 B2C (India) Foodtech
29 Udaan Bangalore 2016 2018 B2B (India) E-commerce
30 Zomato Delhi NCR 2008 2018 B2C (India) Foodtech

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APPENDIX 2: AUTHORS
For further information or questions, please contact:
Anand Prasanna
Managing Partner
anand@ironpillarfund.com
Anand is the Managing Partner at Iron Pillar.
Before co-founding Iron Pillar, Anand led the Asia
office for Morgan Creek in Shanghai, where he had a
first-hand view of the rising tide of technology
companies in China. Prior to Morgan Creek, Anand
had investing stints at Squadron Capital, Hong Kong
and Sequoia Capital, Bangalore where he backed
technology businesses and venture funds in India as
well as South East Asia and Australia. Anand
worked with McKinsey & Co. India office before
starting his investing career.
Anand earned a PGDBM at Fore School of
Management and a BBA at University of Kerala.
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Mohanjit Jolly
Partner
mj@ironpillarfund.com
Mohanjit is a Partner at Iron Pillar.
Before co-founding Iron Pillar, Mohanjit served as a
Partner at Draper Fisher Jurvetson for 9 years,
establishing their India operations, overseeing the
India venture portfolio and coordinating business
development efforts with Fortune 500 companies.
Prior to this, he was a Partner at Garage Technology
Ventures, a Silicon Valley seed stage VC firm. His
early years in California and Boston saw him help
launch ViaSpace, a technology incubator in
conjunction with Caltech and JPL and help launch
Intel Play, a JV between 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 a BS & MS, Aeronautics and
Astronautics Engineering from MIT.
Sanjna Tulsiani
Investment Analyst
sanjna@ironpillarfund.com
Sanjna is an Investment Analyst at Iron Pillar.
Prior to Iron Pillar, Sanjna’s expereince revolved
around public markets, mostly with Morgan Stanley
Capital International in the global market index
function. Her last stint was as a lead manager at an
IR consulting company for publicly listed
companies, strategically advising management and
representing their interests in the investor
community. Her academic years saw her intern with
First Global Securities Ltd., focusing on research on
macroeconomic trends and regulatory & policy
reforms.
Sanjna has completed the CFA program and holds a
M.Com and BMS Finance from University of
Mumbai.
DISCLAIMER
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, including secondary 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 been independently 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 as tax, 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 sell any 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 such marks are reserved by their respective
owners.

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