In part two of our special series 'Unicorn HealthCheck', which explores what's working and what's not for India's billion-dollar startups we focus on the estimated and real market that India's billion-dollar startups are targeting.
Over $80 billion have been invested in 102 unicorns with a combined valuation of over $350 billion. Interestingly, many of which are valued at 10 times their global peers, most unicorns spend Rs 1.5 to Rs 2 to earn a single rupee of revenue, prioritising growth over profits, this as per calculations based on FY22 earnings and last known valuations.
This brings us to the market Indian tech startups are chasing. India has the world's second-largest internet user base, with about 780 million users today, twice as many as the United States.
By 2030, India is projected to surpass China and have the most internet users globally, with over a billion users, according to RedSeer.
However, the available market is much smaller, and the obtainable market is even much so, with the overall consumer market being about one trillion dollars serving a population of 1.4 billion people. As per a Bain-Accel report, the same applies to the B2B unicorns going after 65 million MSMEs, with less than a million of these small businesses being active or repeat customers.
The reality of the actual users shows that half a billion Indians are not active transactors, meaning they do not engage in online transactions. Only about 300 to 325 million people actually transact online, but these users tend to be opportunistic with low loyalty. The mature users, who are frequent online shoppers and spend about half of their wallet online, are only about 40 to 45 million, calculations by Redseer have shown. While it is projected that this number could increase to 150 million by 2030, but even then, it would still be less than 20 percent of the real market.
To gain a better understanding of this, let's delve into what our unicorns are truly catering to, starting with Zomato. Despite India having 40 to 45 million frequent internet users, Zomato only has around 17 million monthly active users according to company filings.
Nykaa, on the other hand, targets 180 to 190 million online shoppers, but only receives regular orders from 24 million buyers.
Byju's, which focuses on school-going children, has a target market of 350 million, but only 7.5 million pay for their services.
Cars24, which operates in India's used-car market, sold 4.4 million cars, but still only had a market share of less than one percent in FY22.
The scale of the Indian market can also be seen in the stock market, where only eight to nine crore of the nation's 140 crore population hold a demat account, and India's top broker, Zerodha, claims to have one crore users.
On the enterprise side, OfBusiness caters to only 0.7 million of India's 65 million MSMEs.
These numbers give us an idea of the actual market versus the potential market.
