Peer to peer lending

Amid the bustling startup ecosystem in India, a select few have emerged as profitable unicorns. Of the 114 unicorns in the country, 17 have turned profitable, as reported by the market research platform, Tracxn. Here, we delve into these companies’ journeys, their strategies for success, and the broad trends shaping India’s startup landscape.

The Profitable Champions

Leading the pack are Zerodha, Zoho, Firstcry, and Billdesk, and an intriguing addition to this list is the P2P lending platform, LenDenClub. These startups have managed to carve out significant profits, demonstrating the power of innovative business models, sound financial management, and an unwavering commitment to customer value.

1. Zerodha: With profits amounting to Rs 1,609 crore in FY 22-23, this stock brokerage platform has gained a foothold in the market by focusing on providing a seamless and cost-effective trading experience to its users.

2. Zoho: A Software as a Service (SaaS) platform, Zoho reported profits of Rs 2,354 crore in FY22 – 23. It owes its success to a robust suite of business productivity tools that cater to the evolving needs of organizations around the world.

3. Firstcry: Profits for this e-commerce platform stood at Rs 270 crore for FY22 – 23. A comprehensive range of products, a user-friendly interface, and efficient delivery systems have set Firstcry apart in the highly competitive e-commerce market.

4. Billdesk: This fintech firm recorded profits of Rs 110 crore in FY22 – 23. As a payment solutions provider, it has won customer trust through secure transactions and exceptional customer service.

5. LenDenClub: Breaking into profitability, this P2P lending platform was the first of its kind in India to achieve profitability. A strong focus on technology and product development has propelled LenDenClub’s growth. This extraordinary growth narrative underscores the potential for innovative solutions in the fintech sector.

Other profitable unicorns in India include Molbio Diagnostics, Uniphore, Xpressbees, Physicswallah, CoinDCX, and Mamaearth, each with its own unique business approach and success story.

Special Cases: PhonePe and Flipkart

PhonePe, a fintech company, is an interesting case. Initially acquired by Flipkart in 2016, it separated from the Walmart-owned brand in 2023, creating an ambiguous status. PhonePe’s strategic shift to domicile from Singapore to India presents a unique situation, illustrating the complexities that can arise during the startup journey.

Flipkart’s growth narrative has been equally compelling. After being fully acquired by Walmart in 2020 for an astounding $1.2 billion, Flipkart’s valuation skyrocketed to around $37.5 billion, making it one of India’s most valuable startups.

Changing Unicorn Status: Acquisitions and IPOs

Several startups have transitioned from their unicorn status due to acquisitions or public listings. Tata1mg, Blinkit, Rivigo, BigBasket, and ShopClues were all acquired, leading to a shift in their status. BigBasket and Tata1mg were bought by Tata Digital, and Walmart’s purchase of Flipkart was one of the most prominent deals.

Public listings have also marked the growth journeys of startups like Paytm, Zomato, Nykaa, Delhivery, and PolicyBazaar. However, their valuations dipped post-listing, as revealed by Hurun. Moreover, the valuation of startups like Quikr and Paytm Mall was cut down, leading to a downgrade from their unicorn status.

The Larger Startup Ecosystem

Despite some challenges, such as a 50% dip in investments for late-stage startups, 2021 was a notable year for India’s startup ecosystem, attracting a whopping $42 billion from global investors. However, the investment scenario has slowed down in 2023, with global VCs sitting on dry powder worth $590 billion.

Conclusion

With over 92,000 registered startups in India, the startup ecosystem is burgeoning with potential. The profitable journeys of the unicorns, including LenDenClub, India’s largest peer to peer lending platform, shed light on the road to success and profitability. It is now clear that strategic innovation, diligent execution, and strong customer focus are key to thriving in this dynamic environment.