The number of unicorns (with the $1 billion valuation and above) in India has dropped to 85 from more than 100 just a couple of months ago, as most startups have shed a significant share of their valuations while investors stay back amid the prevailing global economic turmoil.
According to data compiled by Finbold, the US has the highest number of unicorns at 704 while China comes a distant second with 243 unicorns (as of November this year).
Despite the general market conditions, several regions are leading in the number of unicorns or private companies valued at least $1 billion.
"The United Kingdom ranks fourth with 56, while Germany ranks fifth with 36 unicorns. Indeed, the US has at least double the number of unicorns compared to both China and India combined," according to the report.
In May this year, India welcomed its 100th unicorn, which was Bengaluru-based neobank platform Open that raised fresh funds as part of its Series D round, taking its valuation to $1 billion.
Indian startups raised more than $42 billion across 1,583 deals in 2021 and the country say 42 unicorns last year, taking the number to 86.
In the first half of 2022, India added 14 new unicorns, according to the Hurun Global Unicorn Index 2022, as the funding winter hit the startup ecosystem which has only gone worse with thousands of employees being asked to go.
The startup ecosystem's funding winter could last another 12 to 18 months.
Only two startups in India, Shiprocket and OneCard, attained unicorn status (valuation $1 billion and above) in the July-September period, mirroring a global trend in decline in the number of new unicorns, a PwC India report showed.
According to the Finbold report, Elon Musk's space company SpaceX ranks top in the US with a valuation of $127 billion, while payment firm Stripe ranks second at $95 billion. Instacart ranks third, valued at $39 billion, followed by Databrick's $38 billion valuation. Meanwhile, gaming company Epic Games ranks fifth at $31.5 billion.
"The US dominance over China can be linked to the Asian country's stringent laws on the private sector. With a robust private sector led by the tech industry, the government moved to curtail the powers of such entities. In this case, there is a widespread fear of companies accelerating their growth, with venture capitalists remaining sceptical," the report mentioned.
Notably, with the $1 billion valuation, most companies still depend on external funding while attempting to work out a profitable model.
Critics have, for instance, stated that attaining unicorn status without profitability might be considered a fad.
"It is worth noting that unicorns are now prime candidates for Initial Public Offering (IPO). However, the possibility of launching an IPO will likely depend on the state of the economy. Notably, the stock market remains depressed, with most companies losing a big chunk of their valuations," the report said.