Indian Startups Can Fire 60,000 Employees Due To Lack Of Funding; But Unicorns Will Rise To 200

The Indian startup culture is witnessing a duality- while more and more unicorns are expected to emerge, tens of thousands working in startups are left unemployed with mass layoffs happening every other day. 

The ‘ASK Private Wealth Hurun India Future Unicorn Index 2022’ list names nearly 122 startups from 25 cities that are on the verge of becoming unicorns.

Unrelenting mass layoffs

On the flip side, the number of startups laying off employees en masse is also rising. 

Nearly 12,000 startup employees have been shown the door to date, led by companies like Ola, Blinkit, BYJU’s (White Hat Jr, Toppr), Unacademy, Vedantu, Cars24, Mobile Premier League (MPL), Lido Learning, Mfine, Trell, farEye, Furlanco and more.

Industry experts predict that at least 50,000 more unfortunate souls will be sacked this year alone, all in the name of “restructuring and cost management” while certain startups keep receiving millions in fundings.

The future

Anas Rahman Junaid, MD and Chief Researcher, Hurun India noted that there are “concerns” in the world economy that can hit the valuations and capital raising ability of Indian startups.

He believes that layoffs and cost-cutting measures could be a “blip” in the growth story in the short run.

But the long-term potential of the Indian start-up ecosystem remains “excellent and resilient”.

Most valuable unicorn also guilty

Earlier this week BYJU’s, India’s most valuable startup, cut more than 600 jobs.

300 of those employees worked at its Toppr learning platform and another 300 at coding platform WhiteHat Jr, both of which have been acquired by the edtech major. 

The edtech sector has been hit particularly hard by the global macroeconomic conditions and reopening of schools, colleges and physical tuition centres after years of strong growth. 

Types of startups

The Hurun list has categorized three different types of startups. 

• Would-be unicorns (those founded after 2000 and valued at least $1 billion)
• Gazelles (those most likely to become unicorns in two years)
• Cheetahs (start-ups that could go unicorn in four years)

Cities housing the most 

It has predicted that India would have 122 new unicorns in the next two to four years.

They come from 25 cities with Bengaluru leading the pack with 46 unicorns.

Delhi-NCR and Mumbai are in the second and third spots, with 25 and 16 unicorns.

Service/goods

A majority of the prospective unicorns sell software and services and only 17 per cent sell physical goods.

37 per cent are business-to-business sellers, while 63 per cent are consumer-facing.

The tally

According to the latest report, India has 84 unicorns, 51 Gazelles, and 71 Cheetahs.

In the 2021 index the tally stood at 51 unicorns, 32 Gazelles, and 54 Cheetahs.

As many as 17 Gazelles and 7 Cheetahs, from last year’s index, hit unicorn valuation this year.