Indian startup ecosystem, which was once known for its rapid growth and mushrooming unicorns (companies valued at $1 Billion or more), is facing a downturn as reports suggest a decline in the unicorn numbers in the country from last year.

For the first time in four years, the total number of unicorns has dropped from 68 last year to 67 as per the Hurun Global Unicorn Index 2024. The report indicates a potential slowdown in the startup sector of India and raises concerns about the sustainability of Indian startups, which has been seen as a key driver of economic growth, employment and innovation in the last decade.

Among the recent developments, Byju's, once valued as India's largest educational technology (ed-tech) startup has witnessed a significant plunge in its valuation. As losses mounted, company had to undertake operational restructuring and cost-cutting measures like layoffs. Negative profitability and over-expenditure on marketing made it worse for the company to sustain in the long run. Additionally the company couldn't achieve its revenue target for the previous financial year and struggled to resolve a debt of $1.2 billion. As of April 2024, Byju's is valued at around $ 250 million, down by 99% from its peak valuation of $22 billion in 2022.

Anas Rahman Junaid, the Chief Researcher of Hurun India, explains that the decrease in unicorn numbers is due to "investment winter" and lack of funding available in the market. He also mentioned that the trend of Indian founders registering companies abroad has further impacted India's startup ecosystem.

The United States tops the global list with 703 unicorns, followed by China at 340. India still ranks at 3rd position despite all the turmoil and downturn. Unfortunately, no Indian startup could make it to the top 10 list of the most valued startups in the world.

Currently, two of the most highly valued Indian startups are the food delivery app Swiggy and the fantasy sports platform Dream11, both valued at $ 8 billion each. Following on the list is Razorpay, valued at $7.5 billion, and many new players such as Krutrim, (an artificial intelligence platform), who have recently joined the Unicorn club