Media release

Credit Suisse: India’s 100-strong unicorn club drives

radical change in the country’s corporate landscape
Hong Kong/Mumbai, March 23, 2020 – India’s corporate landscape is undergoing a radical change
due to a remarkable confluence of changes in the funding, regulatory, and business environment over
the past two decades. Credit Suisse analysts presenting at the 24th Credit Suisse Asian Investment
Conference take an in-depth look at India’s fast-growing community of unicorns – privately-owned
companies valued over US$1 billion. A special Credit Suisse report on India unicorns delves into
India’s 100-strong unicorn market and what India’s start-up boom means for the economy and the
corporate landscape.

The 24th Credit Suisse Asian Investment Conference will take place virtually from March 22 to March
26. This year’s conference brings together more than 4,500 institutional investors, entrepreneurs,
hedge funds, family offices and ultra- and high-net-worth investors, as well as chief executive officers
and chief financial officers of more than 330 companies, representing US$8 trillion of market
capitalization.

Focusing on the theme of 'Disruption accelerated', the 2021 edition will feature more than 100 of the
world’s most influential thinkers and opinion leaders as they explore the disruptive forces that are
changing our lives in a variety of ways at an exponential rate, how we can anticipate, understand and
embrace them, and the investment opportunities they will create. Environmental, social and
governance concerns will be discussed throughout the agenda.

100 unicorns have created US$240 billion of value

An unprecedented pace of new-company formation and innovation in a variety of sectors resulted in a
surge in the number of highly valued and as-yet-unlisted companies. Against 336 listed companies
with a ~US$1 billion market capitalization, there are now 100 unicorns in India with a combined
market capitalization of US$240 billion.

Neelkanth Mishra, Co-Head of Equity Strategy, Asia Pacific and India Equity Strategist at
Credit Suisse said, “Our research found 100 unicorns in India in a diverse set of industries, including
technology and tech-enabled sectors, such as, pharmaceuticals/biotech and consumer goods,
benefiting from formalization and accelerating digital adoption. Fast-growing and innovative (unlisted)
firms are sprouting up in new sectors as well as locations across India, rapidly gaining scale as they
ride unique growth opportunities from digital public infrastructure and partnerships.”

FinTechs are leading India’s unicorn landscape

The sectoral split is highly diversified for these 100 unicorns in addition to the largely expected e-
commerce, financial technology (FinTech), education technology, food delivery, and mobility
companies. Furthermore, there is a rapidly growing number of firms in industries such as Software-as-
a-Service (SaaS), gaming, new-age distribution and logistics, modern trade, biotech, and
pharmaceuticals. Even fast-growing consumer brands have benefitted from accelerating internet
penetration and formalization of sectors.

Along with the rapidly growing economy, the market capitalization of listed equities in India has risen
too, making India the eighth-largest market globally. Growth for the Indian start-up ecosystem has
accelerated as well, making India home to the third-largest set of unicorns globally, behind the US and
China, and commanding a total valuation of US$90 billion. Constituting ~30% of the Indian unicorn
ecosystem, FinTechs, including e-commerce, have been leaders in the Indian unicorn landscape, with
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the sector spawning five unicorns having an aggregate valuation of US$22 billion, the highest
amongst Indian unicorns.

Ashish Gupta, Head of Asia Financials Securities Research and Head of India Securities
Research, Credit Suisse said, “Indian FinTech companies have attracted US$10 billion of capital
and are now at the forefront of India’s startup ecosystem. Digital payments are primarily leading the
FinTech scale-up in India and have grown 10 times over the last five years, now having a 30% share
totaling US$450 billion.”

Digital payments at the forefront of Indian start-up evolution

Riding on the public payment infrastructure, i.e., Unified Payments Interface (UPI), digital payments
have leapfrogged in India growing ~10.5 times over the past five years to an annual payment run-rate
of US$450 billion and now constituting ~30% of retail transactions. Credit Suisse notes that UPI is
the major driver of this accelerated payment digitization as it opened up an interoperable payment
network to large technology companies.

As per the report, digital payments in India continue to grow, with over 200 million active users and
acceptance at more than 30 million merchants compared to 5 million traditional point-of-sale (POS)
terminals. It further highlights that the FinTech sector has been the second-largest recipient of private
equity/venture capital funding over the past decade with payments being the leading sub-segment
raising US$4.2 billion followed by digital lenders raising US$2.5 billion.

Mr. Gupta highlights, “Covid-19 has accelerated the pace of digitization globally across
communication, shopping and payments space. While part of this shift should gradually recover, as we
come out of the pandemic, there is widespread consensus that it has brought a structural change in
categories such as shopping and payments.”

An analysis of credit card spending by customers revealed that the pace of increase in the share of
digital spending was vastly accelerated by the pandemic, with online spending increasing by almost 10
percentage points within nine months from 44% to 53%. It also showed that there is a marked shift in
consumer spending from offline to online.

FinTechs expanding beyond digital payments

Riding the growth in digital payments, India Stack 1 and embedded offerings, FinTechs are expanding
to other financial segments beyond their core/initial offerings to drive monetization.

Mr. Mishra adds, “While most FinTechs are operating in partnerships with incumbent banks and non-
bank financial companies (NBFCs) across lending, liability and fee businesses through embedded
offerings, the FinTech phenomenon is also transcending into other financial segments including
lending, insurance, and wealth management. Having acquired a substantial user base of over 150
million users, FinTech players have even started offering small-ticket personal loans or short-term
credit to monetize their user base.”

In particular, consumer payment players have expanded to offer investing, insurance, lending, and e-
commerce. Merchant payment players have also added value-added services, merchant lending, and
consumer financing at POS terminals to garner a higher wallet share. Digital lenders have grown to

1
‘India Stack’ refers to the trinity of higher banking penetration through Jan Dhan accounts, Aadhaar-based unique identification and
authentication, and increased internet (mobile) penetration. These three together create public infrastructure, which enables paperless,
instantaneous, and cost-effective customer authentication and on-boarding.

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US$10 billion with more than a 40% share in new personal and consumer durable loans and are
adding new loan products as confidence in their underwriting models increase.

FinTechs have also forged partnerships with banks to embed credit products as well as investment
and protection products. While adding new channels of monetization and increasing user engagement,
these partnerships also help incumbent banks to expand reach and increase their share of digital
business.

On the back of proprietary digital platforms and partnerships with FinTechs, digital has helped drive
cross-selling, new business acquisition and customer servicing channels for incumbent banks. Larger
private sector banks and the State Bank of India have developed their proprietary digital platforms,
which source 60% to 70% of new retail customers, 60% to 80% of retail fixed deposits, ~75% new
credit card sourcing and 50-60% of new home/micro, small and medium enterprises loans.

-Ends-

Media contacts
Yukmin Hui, yukmin.hui@credit-suisse.com, +852 2101 6041
Uni Park, uni.park@credit-suisse.com, +82 2 3707 8890
Follow us on Twitter @csapac for the latest Credit Suisse APAC news and research views.

Credit Suisse
Credit Suisse AG is one of the world's leading financial services providers and is part of the Credit Suisse group of companies (referred to
here as 'Credit Suisse'). Our strategy builds on Credit Suisse's core strengths: its position as a leading wealth manager, its specialist
investment banking capabilities and its strong presence in our home market of Switzerland. We seek to follow a balanced approach to wealth
management, aiming to capitalize on both the large pool of wealth within mature markets as well as the significant growth in wealth in Asia
Pacific and other emerging markets, while also serving key developed markets with an emphasis on Switzerland. Credit Suisse employs
approximately 48,770 people. The registered shares (CSGN) of Credit Suisse AG's parent company, Credit Suisse Group AG, are listed in
Switzerland and, in the form of American Depositary Shares (CS), in New York. Further information about Credit Suisse can be found at
www.credit-suisse.com.

About Credit Suisse in India

In India, Credit Suisse is a leader in equity brokerage and research through Credit Suisse Securities (India) Private Limited, which has a
broker dealer license in the Bombay Stock Exchange and National Stock Exchange. It also holds a Merchant Banking License for
investment banking activities, a Research Analyst License for Equity Research, Stock Broker License for Broker dealer activity and a
Portfolio Management License for its Wealth Management business from the Securities & Exchange Board of India. Credit Suisse also holds
a license from the Reserve Bank of India to operate as a scheduled commercial bank. Credit Suisse also has two major centers in Pune and
Mumbai providing support services to its businesses globally.

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