Employees work at a startup office in Delhi. (Photographer: Sara Hylton/Bloomberg)

India Has More Unicorns This Year Than U.K. And Germany Combined

The Indian startup ecosystem has produced more unicorns this year than Germany and the U.K. combined even as seed-stage and early funding for ventures continue to decline.

While India got eight unicorns, including the likes of Oyo, Freshworks, Udaan, Zomato, among others—the most in a calendar year—the corresponding figures for U.K. and Germany are four and two, respectively, according to a report that was released on the sidelines of a Nasscom product conclave in Bengaluru today. The unicorn tally for U.S. and China were 25 and 20, respectively.

However, seed-stage funding in India fell by 21 percent to $151 million in 2018 from $191 million in 2017. Early-stage funding registered near-flat growth of 4 percent with $1 billion.

“We’re seeing a continuous decline in seed-stage funding for two years now, which is a concern,” said Debjani Ghosh, president of Nasscom. “We need a structured approach for early-stage startups, and what are the alternatives to seed stage. This is also where the government can ensure that the needle doesn’t completely move, like in Japan and China.”

However, late-stage funding has surged 259 percent to nearly $3 billion in 2018 over last year, while overall funding has grown by over 108 percent to $4.2 billion from $2 billion in 2017, according to "Indian startup ecosystem—approaching escape velocity”, a joint report by Nasscom and Zinnov. The average time to taken to become an unicorn has come down to 5-7 years, the report said.

Overall, 1,200 startups were added in 2018, up from 1,000 last year, taking the total number of tech startups to about 7,200, as India reinforces its position as the third-largest startup hub.

Ghosh said: “If you start shutting tap in seed stage, innovation will be killed.”

Indian Startups Going Global

B2C Indian startups expanding globally was a key trend this year, with companies such as Ola, Oyo and Byju’s setting up their businesses abroad. Over 400 B2B startups have expanded globally already.

Ghosh said: “More startups are innovating for global problems.”