According to a report, startups expand 3.6 times faster and reach a $100 million top line in just 5 years
- ByStartupStory | January 5, 2023
While the average was over 18 years until 2017, it took Indian startups only about five years to reach the $100 million revenue mark by 2022 as the ecosystem matured over the previous ten years as a result of a rapidly expanding internet user base and better capital availability.
Over 40 unicorn and soonicorn startups operating in industries like fintech, e-commerce, and logistics have crossed the $100 million revenue milestone as of FY22, according to a recent report by tech and data-driven consultancy firm Redseer. It took them 5 to 12 years to get there.
The startups that have attained that scale include Zomato, PhonePe, Mamaearth, Zetwerk, and OfBusiness, among others, according to the report. According to the report, venture capital infusions into the Indian startup ecosystem have helped businesses scale their revenue more quickly. According to the report, investors also provide their portfolio companies with governance, financial caution, and networking in addition to capital.
Data from the Redseer report indicates that over the past 15 years, venture capitalists (VCs) have made about $143 billion in investments in the startupecosystem. The market is worth $804 billion, which would yield VCs returns on their investments of about 4.5 times.
The report also stated that scaling is difficult for startups in niche industries because their total addressable market is constrained (TAM). According to the report, those operating in the highly competitive red ocean market—which includes industries with clearly defined market spaces and industry boundaries—need a distinct advantage to survive.
According to a Redseer report, India has about 12,000 startups, of which 95% are small businesses with annual revenues under $10 million, 2-3% are in the growth stage with annual revenues between $10 million and $100 million, and less than 0.5 percent are large businesses with annual revenues over $100 million.
According to the study, organisation, governance, and operational bottlenecks and low profitability are to blame for some startups’ inability to survive.
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