The average time taken by Indian start-ups to cross $100 million in revenue has reduced from 18 years in 2000 to 5 years in 2017, said a report by consulting firm Redseer.
India has about 100 unicorns (a privately held start-up valued at over $1 billion) and 170 soonicorns (a start-up with the potential of being a unicorn). Of these 270 firms, over 40 start-ups in the fintech, e-commerce, and logistics sectors have crossed $100 million in revenue as of FY22, taking anywhere from 5 to 12 years to reach this scale.
Venture capital (VC) has played a central role in helping start-ups scale to this milestone, said the report. VC firms have invested about $143 billion in the start-up ecosystem over the last 15 years (CY08 to CY22). The ecosystem is valued at $804 billion. At current valuations, this translates to approximately 4.5x return for VCs on their investments.
Most start-ups face scaling challenges in their growth journey, the report said. Many belong to niche industries which restrict their total addressable market, while others need help with product-market fit and unsustainable growth.
The challenges that sink start-ups come from poor profitability and bottlenecks in organization, governance, and operations, said the report.