2018 was an year when the unicorn club in Indian startups moved from being aspirational to almost a run of play. Huge investor interest in Indian startups signaled both confidence in their business models and the potential of the market. However, the year also brought in scandals, setbacks and exits for some of the most iconic startup founders in the country. Dkoding presents an exclusive list of those startups that hogged the headlines in 2018.
- Vijay Shekhar Sharma, Paytm
Paytm is now officially the most valued Indian unicorn after the acquisition of Flipkart, and touched the US$ 10 billion mark in January 2018. Since then, Paytm has launched various products like Paytm Money, Paytm Insurance and Partner Network Insurance. It also launched a digital payments product PayPay in Japan in collaboration with Softbank. The event of the year for Paytm, however, was the investment of US$ 300 million by Warren Buffet’s Berkshire Hathaway, incidentally the investment giant’s first direct investment in India. But two incidents were damaging to the company’s credibility. Firstly, a sting video in May by Cobrapost showed Paytm VP Sudhanshu Gupta, and Vijay’s brother Ajay Shekhar Sharma confessing that they had shared data with the PMO without users’ consent. In November, news of Vijay and his family being blackmailed by a group led by his former secretary and VP, Corporate Communications Sonia Dhawan over a data leak also made for unpalatable headlines.
- Ritesh Agarwal, Oyo Rooms
Oyo received funding of US$ 1 billion in September, and is now valued at US$ 5 billion, giving it the tag of India’s most valuable hospitality company. Besides the valuation, its China operations were the highlight of the year even as it expanded to other markets including UAE, UK, Indonesia, Spain, Portugal and Japan. It rapidly ramped up its capacity to 180,000 rooms in China in just one year, overtaking even its India portfolio which is at 140,000 rooms. Oyo is now among the top 5 hotel chains in China and Agarwal is confident that at the rate of 50,000 keys a month, the company will be at least twice the size of the world’s largest hotel chain by 2023 with 2.3 million rooms. In December, media reports also indicated that Oyo could be the first India-bound investment for Singapore-based ride-hailing company Grab.
- Byju Raveendran & Divya Gokulnath, Byju’s
Byju’s emerged as the most valued edtech firm in the world this year, after securing a funding of US$ 540 million in December. The investment valued the company at US$ 3.6 billion compared to US$ 1 billion last year. With this investment, Byju’s beat the likes of Chegg (US$ 3.36 billion), Plurasight (US$ 3.23 billion), 2U (US$ 3.21 billion), VIP Kid (US$ 3 billion) and Coursera (US$ 1 billion). The company plans to use these funds to expand its product portfolio and spread to English-speaking countries like US, UK and Australia. Byju’s is targeting a gross revenue of US$ 242 million and a net profit of US$ 83.3 million by 2022. It aims to almost double its revenue to US$ 69 million in FY 2018. By June 2018, it had 20 million registered students and 1.26 million paid annual subscriptions.
- Sachin & Binny Bansal, Flipkart
The startup that inspired many enterprising young minds in India to take the plunge was acquired by Wal-Mart for US$ 16 billion in 2018. This was the largest acquisition in the Indian market ever and also the largest in the global e-commerce space. Sachin Bansal immediately left after the acquisition, but the drama started with Binny Bansal’s exit for ‘lapses in judgment’ and ‘lack of transparency’ in context of an allegation of sexual harassment against him in November. After that the Flipkart ship has been rocking unsteadily towards the end of 2018 with senior management exits, layoffs and confusion regarding the future of Myntra and Jabong. The challenges for e-commerce companies like Flipkart got even worse with e-commerce policy changes last week preventing sellers with equity participation from selling on their platform. It leaves Flipkart with a huge inventory worth around Rs 2,000-2,500 crore that it needs to liquidate by January 2019. Meanwhile Sachin Bansal is back in the game with a new venture – BAC Acquisitions Private Ltd that will focus on investments in early to mid-stage startups. Binny Bansal is also reportedly planning the launch of a startup named xto10x Technologies with former Mckinsey consultant Saikiran Krishnamurthy. It will provide technology tools, learning and consulting services to growth stage startups.
- Sriharsha Majety, Nandan Reddy & Rahul Jaimini, Co-founders, Swiggy
Swiggy and Zomato have been continuously engaged in a battle for dominance in the foodtech sector. A critical fuel for this battle is funds, since both players have been leaking cash at a rate of around Rs 200 crore per month. Zomato secured US$ 410 million in two funding rounds in 2018. Swiggy was standing at US$ 210 million for most of the year, but took a decisive lead in December with a blockbuster funding round of US$ 1 billion. Certainly, this funding gives Swiggy a major leg up over its competition in the new year. But with Zomato taking the lead in drone deliveries, Swiggy cannot take it lightly. Majety sums it best when he says, “In the end, fundraising makes sure we don’t lose but doesn’t make sure we win.” Among other highlights, Swiggy also acquired on-demand delivery platform Scootsy in 2018 to further strengthen its delivery fleet.
- Bhavish Aggarwal & Ankit Bhati, Ola
The year started on a slightly bitter note for Ola with a protest by 40,000 drivers in Chennai in January. Merger talks with Uber also did the rounds in March. Issues with drivers continued, but the company also announced expansions into Australia, New Zealand and UK in 2018, buoyed by the US$ 1.2 billion in funding it received in 2017. It aims to reach 50 international cities by 2019. Ola also showed signs of widening its reach to other segments of urban mobility. It acquired Ridlr, which is an end-to-end ticketing and commuting app for public transport in April, and invested US$ 100 million in scooter-sharing app Vogo. Ola’s subsidiary Foodpanda also acquired foodtech startup Holachef, with plans to build India’s largest cloud kitchen network. Ola founders were reportedly wary of another offer by Softbank to invest US$ 1 billion in the company, as the investor already has a stakeholding of 26%.
- Deepinder Goyal, Zomato
2018 was a mixed year for Zomato. In the beginning of the year, Morgan Stanley marked up its valuation to US$ 2.5 billion. After the acquisition of Runnr, Zomato ramped up its delivery fleet rapidly and was delivering 60% of orders on its platform by March 2018. Among other major acquisitions, it acquired TongueStun to expand into the corporate cafeteria sector and drone delivery startup TechEagle. However, the company got a shock in March 2018 with the exit of its co-founder Pankaj Chaddah. For a company that has constantly taken an uncompromising stand on food quality and compliance, a video of one of its delivery boys eating food out of delivery boxes that went viral on December 9 was a huge PR disaster. Towards the end of the year, the company has announced a food & entertainment carnival called Zomaland in Mumbai, Delhi and Pune. It will bring together some of the best eateries and chefs across India along with entertainment for visitors. It will help give an offline face to Zomato as it penetrates the hinterland.
- Sujeet Kumar, Vaibhav Gupta & Amod Malviya, Udaan
B2B marketplace Udaan made history by becoming the fastest unicorn in India when it raised US$ 225 million from DST Global and Lightspeed Venture Partners’ global fund. It got the funding within 26 months of founding by three ex-Flipkartians who started the company in 2016. The startup manages a web platform that connects SMBs, manufacturers, wholesalers, traders and retailers. It has around 150,000 buyers on its platform from 29 states currently. At present, the company sells electronics and consumer goods and plans to enter industrial goods, groceries and other products soon. The company claims to currently account for 15-20% of the business of the sellers on its platform. It is further looking at a huge opportunity of around US$ 700 billion, the estimated size of India’s B2B market by 2020. However, Paytm Mall is also emerging as a huge competitor, as it has launched its B2B buying app.
- Girish Matrubootham & Shan Krishnasamy, Freshworks
Chennai-based B2B software-as-a-service (SaaS) company Freshworks became a unicorn this year when it raised US$ 100 million at a valuation of US$ 1.3-1.4 billion from existing investors Sequoia Capital, Accel Partners and CapitalG in July. It also added five more products to its suite and increased its team size to over 1300. The company has also expanded internationally to Middle East, South Africa and Australia. Started in 2010, the startup competes with the likes of Zendesk & Salesforce. But Freshworks customer engagement platform has been appreciated by clients and investors alike for its flexibility to the needs of every business. The company has around 150,000 clients globally. It plans to use the funds to make further improvements in its SaaS (software as a service) platform and grow its sales across markets. Freshworks has received US$ 250 million in funding since its inception.
- Kunal Bahl & Rohit Bansal, Snapdeal
Snapdeal was in deep turmoil in 2017 over months of frustrating negotiations on a merger with Flipkart. As Kunal admits in a LinkedIn Post in October this year, the talks were costing the company “money, morale, momentum and more”. On July 31, when the founders and the Board decided to go ahead as an independent company rechristened Snapdeal 2.0, the company only had a few months of money left. A key component of the turnaround was to get rid of non-core businesses, which is why it sold FreeCharge to Axis Bank and Vulcan Express to Future Group. Snapdeal’s turnaround in 2018 has surprised investors, as it has managed to increase its order volume by four times and add 50,000 sellers to its platform in a span of a year. Kunal also claims that the company became cash flow positive in June 2018.