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India has the potential to churn out 122 new unicorns in the next two to four years, as per the ‘ASK Wealth Hurun India Future Unicorn Index 2022’, released on Wednesday (June 29).

The report said that the 122 prospective unicorns are from 25 Indian cities and have a combined current net worth of $49 Bn. Most of these startups were founded, on an average, in 2015 with a majority of them involved in the sale of software and services.

Of the 122 upcoming unicorns, only 17% sell actual physical products. While 37% of these future unicorns operate in the business-to-business (B2B) space, 63% are consumer facing. 43% of the total number of future unicorns in the report were from ecommerce, fintech and software-as-service (SaaS) segments.

Fintech continued to play host to some of the most-valued startups in the report. With 27 future unicorns and a combined valuation of $11.5 Bn, fintech topped the sector-wise analysis of the index. Ecommerce came second with 14 unicorns and $6.13 Bn in combined valuation. Next on the list was SaaS segment with 11 future unicorns and $2.9 Bn valuation and edtech with seven startups and $3.02 Bn in combined valuation.

“We believe that there could be a blip in the growth story in the short run, but the long-term potential of the Indian startup ecosystem remains excellent and resilient. The pinch felt in the valuation exercise and extra scrutiny of deliverables could help in broad basing the system,” Hurun India managing director (MD) Anas Rahman Junaid said.

The report broke down the future unicorns across two categories – Gazelle and Cheetah. Gazelles are the startups founded post 2000 that are tipped to turn unicorn in the next two years, while Cheetahs are the ones founded post 2000 and poised to become unicorn in the coming four years.

Logistics major Shiprocket was the most valued Gazelle in this year’s list, while online furniture platform Pepperfry and fintech player Juspay were the most valuable Cheetahs.

Other startups that can turn unicorn in the next two years include quick commerce platform Zepto, ecommerce startup Turtlemint, electric vehicle startup Ather Energy, fintech platform Vivriti Capital, agritech startup Ninjacart, quick commerce startup Dunzo, mobility platform Rapido, among others.

Meanwhile, Bengaluru continued to be the startup hub of the country, as per the report, with 46 of the future unicorns based out of the city. It was followed by Delhi-NCR with 25 probable unicorns  and Mumbai with 16 prospective unicorns.

As many as 21 of the country’s future unicorns are based abroad. These include 18 startups based in the US, 2 in Singapore and 1 in the UK. 

Sequoia Capital emerged as the biggest winner amongst venture capital firms, having invested in 39 probable unicorns. It was followed by Tiger Global, which has stake in 27 future unicorns, Accel (21), InnoVen Capital (16), Blume Ventures (16), among others.

Among angel investors, Kunal Shah led the pack with investments in 10 future unicorns. Rohit Bansal also has investments in 10 prospective unicorns. The list also featured Kunal Bahl, Binny Bansal and Anand Chandrasekaran among the top angel investors in the country with stakes in the prospective $1 Bn valuation startups.

Despite a huge number of startups ready to enter the coveted unicorn club, barely 17 of them made profit in the financial year 2021, the report said. Besides, the 122 companies together cumulatively employ more than 82,300 people. 

Most of the future unicorns, 90, counted IIT-alumni as their founders, while IIM-alumni founded 32 of the prospective unicorns. 

A majority of future unicorns, 51, had two founders, while 29 prospective unicorns had three founders. Of all the startups in the list, WOW Skin Science had the highest year-on-year revenue growth in FY21 at 1,440%, followed by retailtech startup Avataar with 1,037% in FY21.

The biggest employer among the future unicorns is ecommerce platform Square Yards with 5,390 employees. Logistics Ecom Express employs 3,600 personnel, while Shadowfax has a headcount of 3,110.

The Indian startup ecosystem has been reeling under the impact of the funding winter chill has forced many startups to retrench and layoff employees. As per Inc42, Indian startups raised $1.6 Bn across 117 deals in May this year, a 53% decline from $3.4 Bn fundraise in April. As a result, new-age tech companies have so far fired more than 10,000 employees in 2022.

India currently has 103 unicorns, with LeadSquared becoming the latest to join the club earlier this month.