View: Contrast of the Billion Dollar behemoths: Private vs Public unicorns

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Tech unicorns are agile cheetahs, with their revenues growing at around 90 percent+ median as compared to 2 percent median for their public peers over the last 2 years (FY18-20). For startups, this is a survival imperative and many of them are chasing a winner-take-all market, where time to scale is a crucial metric.

View: Contrast of the Billion Dollar behemoths: Private vs Public unicorns
The last decade has really seen the Indian start-up ecosystem come into its own attracting billions of dollars of investments. Consider this, funding into the ecosystem has grown to $15.6 billion in 2019 from $5.5 billion in 2014. To top it off, the first 6 months of 2021 alone has attracted $10 billion!
One is reading about a new start-up IPO on the horizon every week. There is funding consolidation happening towards the late stages – Series D and onwards attracted 57 percent of total capital investment in startups in 2020, contrasted with 39 percent in 2016. This has led to a surge of Indian tech unicorns ($1 billion+ valued private companies) – from 16 in 2018 to 53 in 2021.
Compared to these 53 tech unicorns, there are nearly 350 publicly listed companies in India with $1 billion+ market cap. Besides the number itself, there is a stark contrast between the two groups. More money has been ploughed into Indian tech startups over the last 5 years than public listings. This has been driven by multiple factors which have caught the eye of the investors.
Tech unicorns are agile cheetahs, with their revenues growing at around 90 percent+ median as compared to 2 percent median for their public peers over the last 2 years (FY18-20). For startups, this is a survival imperative and many of them are chasing a winner-take-all market, where time to scale is a crucial metric.
This disparity has intensified due to COVID, which has accelerated movement towards digital adoption across fields such as education, healthcare, financial services, providing a tailwind to many startups in their growth journey. Tech unicorns are disrupting the playing fields of their public peers, or in some instances outright acquiring them, such as PharmEasy’s $612 million acquisition of majority stake in Thyrocare!
The fast rate of growth for these unicorns is reflected in the time to achieve the elusive unicorn status. Startups have reached the $1 billion valuation mark much faster than their public peers.
Unicorns announced in 2021 took 6 years (median) to achieve that status. And across all the unicorns, the median stands at 7 years to achieve the unicorn status. While for public companies created after 1990, it took 17 years (median) to reach $1 billion in market cap. Further, nearly all of the tech unicorns were born after 2000, while most of the billion-dollar+ publicly listed companies were started before that year.
The sharp contrast is also visible in the kind of sectors these companies are present in. Among tech unicorns, SaaS, Fintech and Retail companies rule the roost accounting for around 60 percent of all the unicorns.
Public billion-dollar companies on the other hand are much more diversified with Banks & NBFCs, Chemicals, and Pharmaceuticals, being the biggest sectors at 27 percent total share.
In the public market realm, India is placed quite differently from the US or China – within the top 100 publicly listed companies, very few (e.g. InfoEdge) are internet-based or digital native businesses, while a large proportion of the top 100 companies in the US and China are so, including the likes of recently listed digital natives such as AirBnB, Zoom, Meituan and Pinduoduo.
However, higher rewards come with higher risk, and the risk profile of investing in start-ups continues to indicate that. Of the tech unicorns, only 30 percent are profitable in contrast with around 90 percent of publicly listed firms. Global failure rates to exit even at later stages (Series D and above) continue to be 60-70 percent.
Further, while both private and public markets are prone to valuation and funding bubbles, given human sentiment and other factors, private markets remain more susceptible. This is driven by multiple factors, including limited information disclosure, making it difficult to optimally assess and value a company; a fewer number of available opportunities in private markets creating ‘scarcity’ effect; and the very construct of startups with short histories, creating difficulty in assessing the longevity of future position.
As such, the comparison between tech unicorns and publicly listed counterparts remains stark with the former growing at a much rapid pace, achieving unicorn status at a faster pace, concentrated in a few sectors and representing a higher risk profile.
However, as we look ahead, this picture is set to change with over 15 big Indian unicorns set to go public. This includes the likes of Zomato, Paytm, Flipkart, Nykaa, Policybazaar.
Zomato with its planned IPO raise of Rs 9,375 crore, of which it has already raised Rs 4,196 from 186 anchor investors is opening the doors for tech companies’ exodus into the publicly listed world. On the other hand, Paytm is planning a total offer size of a whopping Rs 16,600 crore.
The unicorns are about to charge through the gates of markets – exciting times for the investor crowd!
- By, Vikash Jain, Managing Director and Senior Partner with BCG; Shaleen Sinha, Head of Growth Tech India at BCG; Vaibhav Malhotra, Principal with BCG, core member of the Growth Tech and TMT practice; BCG colleagues Ujwal Kalra and Pranay Boobna.

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SBI Life Insura1,105.15 28.50 2.65
Tata Steel1,330.65 32.70 2.52
Bajaj Finserv13,807.85 282.80 2.09
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Tata Steel1,330.50 32.40 2.50
Bajaj Finserv13,801.20 275.85 2.04
SBI429.45 6.15 1.45
Bajaj Finance6,231.20 69.05 1.12
Nestle18,238.40 160.85 0.89
CompanyPriceChng%Chng
Hindalco417.35 17.30 4.32
SBI Life Insura1,105.15 28.50 2.65
Tata Steel1,330.65 32.70 2.52
Bajaj Finserv13,807.85 282.80 2.09
SBI429.95 6.65 1.57
CompanyPriceChng%Chng
Tata Steel1,330.50 32.40 2.50
Bajaj Finserv13,801.20 275.85 2.04
SBI429.45 6.15 1.45
Bajaj Finance6,231.20 69.05 1.12
Nestle18,238.40 160.85 0.89

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