UNICORN 2.0 (Syllabus: GS Paper 3 – Economy)

Context: According to a report recently released by industry body CII, new unicorns are expected to contribute to the Indian economy by adding $1 trillion, potentially propelling it to a $7 trillion size by 2030, while also generating 50 million new jobs.

Highlights of Study

• Name of Report: Unicorn 2.0: Adding the Next Trillion
• Emergence of Unicorns: The first unicorn sighting in India occurred in 2011, marking the beginning of a transformative era.
• Rapid Expansion: Within a decade, India has surged past the milestone of 100 unicorns, showcasing remarkable growth and innovation.
• Collective Valuation: As of January 2024, the combined valuation of these 113 unicorns stands impressively at $350 billion, signifying their substantial economic impact.
• Catalyst for Economic Growth: Startups have become integral to India's economy, particularly in nine key sectors ranging from manufacturing to education, fueling growth and dynamism.
• India’s economy across 9 sunrise sectors: Manufacturing; IT and digital services; agricultural ecosystems; healthcare services; travel and tourism, modern retail and e-commerce; next-generation financial services; communication, media and entertainment; and skills and education.
• CII Insights: According to the CII report, India's unicorns and startups have significantly bolstered GDP growth, accounting for 10-15% between 2016 and 2023, underlining their pivotal role in shaping India's economic trajectory.

Unicorn startup

• About: Unicorns are privately held, venture-capital backed startups that have reached a value of $1 billion. 
• The term was first popularised by: Venture capitalist Aileen Lee.
• Very rare and require innovation: Because of their sheer size, unicorn investors tend to be private investors or venture capitalists, which means they are out of the reach of retail investors. 
• Based on growth potential: The valuation of unicorns is not expressly linked to their current financial performance, but largely based on their growth potential as perceived by investors and venture capitalists who have taken part in various funding rounds.