What can Indians learn from the Minicorn Unicorn?

The year 2021 saw the rise of 28 new unicorns so far, an average of three unicorns per month, and this number includes 10 new unicorns in the edtech and fintech sectors, the same as the previous three years combined.

What are the lessons for minicorns? New age startups should create a customer centric business model. They should identify and define the target customer segments and create products that bring solutions to the customers’ problems. Through proper branding and strategy, they must ensure that this value proposition reaches the end user.

What brings a startup closer to success is the execution and customer acquisition strategy, where all the action takes place. For example, one in three children in India uses a byju’s. The primary reason for the growing customer base is its efficiently executed marketing strategies and effective customer acquisition channels such as foot-on-street.

In particular, technology has played an important role in creating leading business models. Most unicorns have leveraged technology in all possible ways, from refining internal organizational processes to enhancing the value proposition for their customers.

New age unicorns like Digit Insurance (online insurance company), Zerodha (simplifying stock trading and taking it to the masses) and Byju’s (a pioneer in digital learning in the K-12 segment) have benefited immensely. Minicorns can prudently take cues from Unicorns in understanding the ecosystem and building a business model that is sustainable as well as adding value.

Promoters are often caught between managing their core business and raising funds for expansion. Since fundraising is critical to business growth and demands careful planning of multiple rounds and equity distributions, Minicorn needs to introduce its business model with due diligence to gain considerable traction from venture capitalists (VCs). which require careful focus on prospects and development plans.

VCs are actively looking for investment opportunities in early stage startups. They have the selectivity to effectively screen startups with a high potential to succeed. VCs primarily look for a mindset alignment with promoters and companies where they, as investors, can add value by leveraging their industry experience, expertise, network and reputation.

In edtech, the early childhood education segment and co-curricular activity segments have gained a lot of traction from the investor community recently. Given their innovative solutions and growing demand, such segments are expected to give birth to a unicorn in the future.

Fintech valuations remained high in the first half of 2021, as investors saw the space as attractive and well-performing. This led to an explosion of unicorn births, mainly in the first half of the year. The segments related to insurance, neo-banking and investment technology have the potential to become the future unicorns of the country.

Indian startups have raised more VC funding in the first half of 2021 than in the whole of 2020. According to data from Venture Intelligence, Indian startups have seen VC investment of $12.1 billion so far in 2021, compared to $11.1 billion in 2020. .

India almost matched its total fintech investment of $2.7 billion in 2020, with an investment of $2 billion in the first half of 2021. An increasing number of business models are now focusing on the delivery and aggregation of financial services products, as seen in seemingly significant traction. In the Insurtech and Wealthtech segments.

Today, more fintechs are adopting the ecosystem model to act as a one-stop shop for customers, with a greater focus on customized products for millennials in lending, insurance, wealth management, etc.

Amit Ratanpal is the founder and MD of BLinC Invest.