Over the years, India has shown its potential as a lucrative market for doing businesses by offering a business-friendly ecosystem, wherein companies can make the most of their expansion plans by grasping the growth opportunities which led to the unprecedented pace of new company formation and innovation in a variety of sectors of the nation.
As a result, today India is home to 100 unicorns (start-ups valued over a billion dollars) which collectively have a market valuation of more than 240 billion dollars. These startups range across different industries, beyond technology and tech-enabled sectors. India’s swift change in the corporate landscape led to the rise of private equity, which has become an imperative source of capital that paved the way for start-ups to scale up rapidly.
One of world’s economical internet services and the last-mile electrification
The rise of Indian Unicorns can be traced by the expansion of telecom and infrastructure connectivity along with the one of most vital growth drivers of the Indian internet economy, the ultra-affordable cellular data services. After nearly five years, India continues to run one of the most economical internet around the globe with data plans at $0.68, the average cost per gigabyte (GB) of data in the country, which is well below the global average of $4.21.
On the other hand, India’s rural road connectivity coupled with last-mile electrification of villages have led to the genesis of digital India, hence the connection of people sitting at the remotest corner of the country.
To further boost India’s digital connectivity, Finance Ministry Nirmala Sitharaman in Union Budget 2021-22 allocated Rs 3.05 lakh crore for the power distribution that will be spent over the next five years. The move aims at infrastructural development, feeder separation, and smart meter installation.
The JAM trilogy: Jan Dhan-Aadhaar-Mobile
To enable banking services to India’s large chunk of the population, who had no access to banking assistance, neither any avenues for savings nor any opportunity to get institutional credit, on 15th August 2014, PM Modi launched the Pradhan Mantri Jan Dhan Yojana. Within months, this scheme transformed the lives and futures of millions of Indians by making them familiar with digital financialization like the Unified Payments Interface (UPI), which has helped India to bypass traditional modes of payment and go straight through to digital payments, while Aadhaar Card simplified the process of payment by know-your-customer (KYC). In April 2021, India recorded 2.6 billion UPI transactions worth Rs 4,93,663 crore.
Today, India is the world’s second-largest hub for FinTech innovation, and it is primed for massive mobile disruption as the only global market with over a billion connected devices. The scale and the speed that UPI carries is unimaginable.
All these major reforms and ground root schemes created a platform for Indian unicorns to flourish, which would have been an uphill task without the digital transformation in the country. And Indian’s “JAM trilogy” –Jan Dhan-Aadhaar-Mobile — came with the same gumption to provide banking facilities to every person with Aadhaar card giving a biometric-authenticated unique identity number, and mobile phones that help to monitor quality and improve the reach of services to every Indian sitting at any corner of the country.
One cannot state a single factor as the creation of unicorns in the country, but it is the amalgamation of various factors which is transforming some traditional businesses and paying the way for the new ones. Further, the formalization of the economy has boosted the financial companies’ reach by tapping into consumer habits and creating a credit facility for individuals, while allowing small businesses to scale up because of the creation of supply chains and easier credit.