Billdesk payment gateway: startup bloom! The number of startups in India has surged from 726 in FY 2016-17 to 65,861 in FY 2021-22, reports Business Standard. This tremendous growth showcases India's strength in innovation and leadership. More interestingly, India ranks third globally with over 100 unicorns. According to the Ministry of Commerce and Industry, 1 out of every 10 unicorns in the world is born in India. People often ask what unicorn means and how to become a unicorn startup in India. This article will reveal the answers!

### Meaning of unicorns

A unicorn is a private startup with a valuation of $1bn. In Indian currency, that's about Rs 7,500 crore. This is a huge valuation for any private company.

Becoming a unicorn is a dream of all startups and a great milestone.InMobi, a mobile advertising startup, became India's first unicorn startup in 2011.Eleven years later, India welcomes its 100th unicorn - emerging banking fintech platform "Open" joins this elite club.

### The way unicorns are valued

After understanding what it means to be a unicorn in the startup space, we can't help but wonder: how is unicorn status achieved? How do unicorns reach such high valuations?

The valuation of a unicorn is usually determined by the investors and venture capitalists involved in the company's funding round. There are many factors that interact when determining the valuation of a unicorn. One may wonder how even startups that are currently losing money can reach such high valuations.

The valuation of unicorns is not just based on their current performance and profitability. It involves long-term forecasting and analysis of financial models. Here are some reasons why unicorns achieve high valuations:

- **Fast growth strategy**: Investors invest large amounts of money to help unicorns grow faster, while also giving investors a higher stake in the startup. This results in unicorn valuations reaching new heights beyond current performance and profitability.

- **BETTER INNOVATION**: Startups with better innovation tend to attract the attention of multiple investors. If your idea solves a real problem, then you're likely to get funding from multiple investors.

- **Powerful user network**: Many start-ups base their revenues on their user network. Although the services offered to users are free, this provides an opportunity for brands to be visible. For example, social media is free to use and has the highest level of user engagement. This provides brands with the opportunity to capture the attention of users, which in turn increases sales. This model excels in attracting investors.

- **Competition in the market**: If you are new to the industry or have little or no competition, then you are likely to attract investors. As a first mover, you have access to a vast untapped market for new products or services. This could dramatically boost your investment.

- **Acquisitions**: Large companies often acquire start-ups to enter new fields, diversify their business or own new technologies. This saves large companies the cost of starting from scratch and provides them with a first-mover advantage.

### Stages of a start-up company

While unicorns are prominent in the startup ecosystem, it is just one of the many stages that startups go through. As a startup's valuation increases, it will gradually climb to the top. Here are the different stages of startup valuation:

- **Valuation stages from unicorn to centurion**

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### Frequently Asked Questions

- **Which countries have the most unicorn companies? **:According to Wikipedia, the United States, India, China, Israel and the United Kingdom are the top five countries with the most unicorn companies.

- **What is the success rate of startups becoming unicorns? **:Only 1-2% startups reach unicorn status.