Graduation Year

2025

Date of Submission

12-2024

Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Murat Binay

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Terms of Use for work posted in Scholarship@Claremont.

Rights Information

© 2024 Tanisha S Kejriwal

Abstract

Over the past few decades, startups and entrepreneurial ventures have surged globally, with unicorns - private startups valued at over $1 billion - emerging as standout success stories. Today, India is home to the third largest number of unicorns in the world, and studying their success factors is becoming increasingly relevant. Using a novel dataset of 112 Indian unicorns, this paper studies economic, founder, regional and industrial factors influencing their valuation/revenue and valuation/profit ratios, in order to identify factors that lead to start-up success. I find that gender, age, total funding raised, and time taken to achieve unicorn status after founding do not significantly affect valuation metrics. However, advanced education and extensive job experience can significantly reduce valuation metrics, emphasizing the importance of innovation and risk-taking. Fintech and SaaS companies had significantly higher ratios, whereas Media companies had lower ones, underscoring the scalability of low-cost tech models. Unicorns based in Delhi outperform others in their valuation/revenue ratios, highlighting the effect of regional characteristics. The analysis also suggests the significance of external economic conditions like Covid-19, with startups entering the unicorn club in 2020 having significantly higher valuation/profit ratios likely due to reshaped investor attitudes and digital adoption. By integrating quantitative analysis with qualitative exploration, this research fills a gap in the literature on Indian unicorns, offering a well-rounded understanding of their success drivers.

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