Startups grow 3.6 times faster and reach $100 million in revenue in only 5 years: Report

Indian startups needed only roughly five years to achieve the $100-million revenue mark by 2022, compared to the average of more than 18 years till 2017, as the ecosystem evolved over the last decade as a result of a rapidly rising internet user base and improved funding availability.

According to a recent analysis by Redseer, a tech and data-driven consultancy firm, over 40 unicorn and soonicorn firms operating in industries such as finance, e-commerce, and logistics have reached the $100-million revenue milestone as of FY22, taking five to 12 years to do so.

According to the research, some of the startups that have attained that magnitude include Zomato, PhonePe, Mamaearth, Zetwerk, and OfBusiness.

Unicorns are startups worth more than $1 billion, whereas soonicorns are firms worth more than $500 million and on their way to becoming unicorns.  

According to the research, the startup ecosystem has spawned more than 100 companies with revenues larger than $100 million.

According to the survey, venture capital flooding into the Indian startup ecosystem has helped companies scale their income at a faster rate. Aside from financing, investors advise their portfolio companies on governance, financial prudence, and networking, according to the research.

According to the Redseer research, venture capitalists (VCs) have invested over $143 billion in the startup ecosystem over the last 15 years. The segment is worth $804 billion, implying a 4.5-fold return on investment for venture capitalists.

Not all of them scale or survive.

According to the survey, businesses in specialist industries frequently experience scaling issues because their entire addressable market is limited (TAM). Those in the red ocean market – those with a well-defined market space and industry boundaries – operate in a highly competitive climate and require a distinct advantage to stay afloat, according to the report.

According to the Redseer report, India has approximately 12,000 startups, of which 95 percent are in the emerging category with revenues less than $10 million, 2-3 percent are in the growth stage with revenues between $10 million and $100 million, and less than half of companies are large with revenues exceeding $100 million.