How will 2018 play out for India’s unicorns?

Leading Indian unicorns such as Flipkart, Paytm and Ola had a brilliant year in terms of the multi-billion-dollar funding they raised in 2017. Between them, they secured around $6.3 billion, expanding their cash reserves and providing some of their early investors a much-needed exit.

Flush with funds, these companies have already started spending heavily on business expansion and acquiring other firms. This year would see more of such moves. Meanwhile, some others such as online classifieds site Quikr and messaging app operator Hike are yet to show strong growth in terms of revenue.

This would also be a crucial year for ShopClues and Snapdeal as the e-commerce battle has largely turned out to be a duel between Flipkart and Amazon. It is unlikely that 2018 will provide us a definite answer as to who is the winner of Indian e-commerce. Here is a look at the scope and challenges that lie ahead for Indian unicorns in 2018.


Last year, Flipkart made headlines when it received the largest ever private capital infusion for any technology firm in the country. Japan’s SoftBank Group Corp invested $2.4 billion from its mammoth $93-billion Vision Fund in the online retailer.

This fund infusion will be key to the online marketplace’s growth in 2018. Backed by one of the world’s biggest investors, Flipkart will have more firepower to keep rival Amazon at bay.

But it may not be as easy as it sounds. Towards the end of 2017, US-based Amazon injected $446 million into its India arm, making it clear that it is here to fight the fight.

Last year, Flipkart was widely reported to merge with its Delhi-based rival Snapdeal but the deal did not go through. By August 2017, Flipkart closed the acquisition of US-based e-tailer eBay’s India arm.

Last year, media reports suggested that Flipkart is looking invest in or acquire players like food delivery platform Swiggy, furniture e-tailer Urban Ladder and home services startup UrbanClap.

This year, under Kalyan Krishnamurthy, its first professional chief executive, Flipkart may acquire startups which might help cement its dominance over Amazon. After all, Flipkart is sitting on a big cash cushion.


Last year, online marketplace Snapdeal, run by Jasper Infotech Pvt Ltd, announced that it would be tweaking its business model and will cut costs as it slashed its employee count. This announcement came after the e-tailer called off its widely anticipated merger with bigger rival Flipkart. Snapdeal had initiated the merger talks with Flipkart in the first half of 2017 at the behest of its biggest investor, SoftBank, after a few unsuccessful attempts to raise capital.

The Delhi-based firm witnessed a lot of top management level exits in 2017 and a legal wrangling with logistics firm GoJavas in which it was a strategic investor.

In the second half of last year, Snapdeal was fairly silent and didn’t make big headlines. Maybe that is what the firm wants right now—focus. Snapdeal co-founders Kunal Bahl and Rohit Bansal had outlined a path to profitability and they had foregone their salaries towards achieving that target. 2018 could be a defining year in the new journey that the company has set out for itself.


If 2014, 2015 and 2016 were largely dominated by the e-commerce narrative, 2017 was undoubtedly the year of fin-tech, and Paytm left no stone unturned. The year started with a bang for Paytm as the spillover effects of demonetisation led to a super-surge in its user base.

To give an idea, about 20 million new users joined the platform 40 days after demonetisation.

In March 2017, it announced the launch of its e-commerce unit, Paytm Mall, inspired by Alibaba’s TMall. In September last year, media reports also stated that the unit was all set to raise over $600 million in fresh funding, after having raised $200 million from Alibaba and venture capital firm SAIF Partners in June 2017.

May 2017 was a significant month for Paym as it launched its much-delayed payments bank and also received a whopping $1.4 billion in funding from none other than Japanese Internet conglomerate SoftBank.

Towards the latter part of the year, Paytm did a reverse Wechat, when it launched Inbox, an in-app messaging service.

In an AMA (Ask Me Anything) session organised by online media publication Inc42 in December 2017, founder and chief executive of Paytm Vijay Shekhar Sharma said that the wallet’s Android app crossed 100 million downloads on December 26. While making no bones about its intention to become a payments behemoth, Shekhar also indicated some hints about its potential new area of interests that include hyperlocal logistics which will undoubtedly complement its e-commerce business.

Expanding its payments bank business will be one of Paytm Payments Bank’s top priorities in 2018. In an interaction with VCCircle in October 2017, Renu Satti, managing director and CEO of the payments bank, said that the firm will invest $500 million into beefing up its KYC compliance and adherence mechanism.

Paytm will also handhold startups through the launch of a startup incubator, focusing on education, financial inclusion, digital lifestyle and emerging technologies such as machine learning, virtual reality and augmented reality, Sharma said in Inc42’s AMA session.

In November 2017, One97 Communications Ltd, its parent entity, reported revenues of Rs 813.88 crore for 2016-17. Its net worth stood at Rs 2,376 crore.


The year began on a tepid note for Zomato, as most of the food tech startups reeled under heavy losses and cash burn throughout the better part of 2016. However, the company started showing signs of a turnround as its food ordering service clocked more than 2 million orders in March 2017.

Revenues from Zomato’s food-ordering business, which contributes 20% to the company’s top line, jumped eight-fold from the previous year to around $9 million in 2016-17.

In September, media reports were rife with speculations that Chinese Internet behemoth Alibaba was all set to pump in around $200 million, an investment which would help consolidate Zomato’s numero uno position in this space.

Zomato also pursued the inorganic route when it acquired on-demand logistics and food delivery startup Runnr, a buyout that is expected to make it a full-stack player in the space. Likewise, it also invested in home-cooked meal delivery startup TinMen.

However, the year was not without some setbacks for Zomato.

In the same month, the online restaurant discovery’s chief operating officer Deepak Gulati quit the company within six months of joining the firm. Likewise, in December 2017, Zomato was in the midst of an ad-campaign controversy, that was deemed offensive and sexist.

Last month, its food delivery vertical saw a new formidable entrant in the form of Ola, which forayed into the food delivery business by acquiring food delivery platform FoodPanda.

The year 2018 will probably see Zomato’s pole position challenged considerably as it battles with significantly well-funded players like Swiggy and FoodPanda, which has also received $200 million from Ola. This could also prompt retaliatory measures from Uber, which launched its food delivery business UberEats, in May 2017


Ola had a busy 2017 as it kept raising funds at frequent intervals throughout the year. It has raised an estimated $1.5 billion last year alone from SoftBank, Tencent, UC-RNT and Falcon Edge among others. The bulk of it was raised in November 2017, when it raised $1.1 billion.

The first half of the year also saw the first-ever drop in bookings for Ola as well as its competitor, a result of its focus on profitability, a report by research and advisory firm RedSeer said. While revenue rose seven-fold to Rs 438.6 crore for the financial year 2015-16, consolidated net losses widened three-fold to Rs 2,311 crore. Ola’s fair valuation adviser, in November, had projected that Ola was likely to register a net profit of Rs 5,996 crore ($930 million) for the year through March 2021.

While that may be the case, Ola did not stop growing its offerings as it made attempts to expand its Ola Bike service through strategic tie-ups with local players in Kolkata and other markets. Towards the end of the year, in November 2017, it piloted its bicycle initiative, Ola Pedal, on the campus of IIT Kanpur.

However, just as it appeared that Ola had pressed the brakes on any kind of expansion or funding activity, it made a big bang announcement in mid-December 2017: the cab-hailing company had acquired FoodPanda, thus rebooting itself into the food delivery business.

The Ola-Uber rivalry is likely to continue in 2018, and there might even be a remote chance of a merger, on the lines of Didi-Uber in China. This is because SoftBank is all set to acquire nearly 15% stake in Uber, and some industry watchers predict it may push for consolidation in India.


After a rather forgettable 2016, the year 2017 saw India’s first unicorn script a turnaround and register a quarterly net profit.

SoftBank’s first Indian bet turned operationally profitable, buoyed by growth in its Chinese operations, which accounted for about 28% of its total sales, making China its second-largest market after the US.

The company’s video-ad platform registered an over four-fold increase in revenues and is also expected to be its biggest growth driver in 2017. According to The Economic Times, the company was on course to record around $445 million revenues and a profit worth $40 million in 2017.

This was in contrast to 2016, which saw the failure of its mobile commerce platform Miip, talent exodus, and a choppy mobile ad market.

The year also saw two of InMobi’s co-founders step down from executive roles. In June 2017, Mohit Saxena, co-founder and chief technology officer, moved on from the firm. In November 2017, Amit Gupta, co-founder and president, quit the firm to launch an Internet-of-Things-driven bicycle sharing startup Yulu. However, Gupta would remain associated with InMobi as a co-founder.


Gurgaon-based e-commerce firm ShopClues, operated by Clues Network Pvt. Ltd, narrowed its losses for the financial year 2016-17. This augured well for the company, which has seen mounting losses over the years. Filings with the Registrar of Companies show that the firm’s losses fell to Rs 332.7 crore in 2016-17. From Rs 38 crore in 2013-14, losses had widened to Rs 101 crore in 2014-15, and to Rs 383 crore in 2015-16, according to VCCEdge, the data research arm of News Corp VCCircle.

Though ShopClues managed to pare down its losses, the company was mired in controversy last year. In March 2017, co-founder Sandeep Aggarwal, who had stepped down after his arrest in the US for insider trading, filed a first information report against his estranged wife and co-founder Radhika Ghai Aggarwal and co-founder and CEO Sanjay Sethi, accusing them of criminal conspiracy, cheating and forgery. He also accused them of thwarting his re-entry into the company.

What is the road ahead for ShopClues? Will it pursue its public listing plans or will it go down the M&A path? The year ahead may provide more clarity.


In 2016, a boardroom tussle involving the founding couple and a subsequent divorce, not to mention a spate of top-level exits, impacted the revenues of MuSigma, which has been consistently profitable over the last five years.

However, in 2017, Dhiraj Rajaram bought out his former spouse Ambiga Subramanian’s 24% stake along with stock options held by employees. In the process, he got control of 52% of the company, making him one of the few private unicorn founders who hold a majority stake in their company.

A September 2017 report in financial daily Mint stated that the company was en route to recovery and was all set to hit $180 million in revenues in 2017. In 2016, its revenues came down to $165 million, a decline from $184 million it registered in 2015.


In an interview with VCCircle in June last year, Quikr India Pvt Ltd’s co-founder and chief executive Pranay Chulet said that he wanted Quikr to be profitable in the upcoming seven quarters.

The online classifieds site has raised over $350 million in venture capital funding, so far. But it is still a loss-making entity. Still, the company has been going on an acquisition spree in the last couple of years. Till date, Quikr has made 12 acquisitions in various verticals.

In December last year, the Bangalore-based firm agreed to buy real estate brokerage firm HDFC Realty Ltd and HDFC Developers Ltd in an all-stock transaction worth Rs 357 crore ($56 million).

Will all these buyouts help Quikr, which turns 10 in 2018, achieve profitability? It's hard to say.


In 2018, the messaging app's first priority should be to find a monetisation model and stem its losses. For the financial year 2016-17, Hike had no revenue from operations. Also, its total income more than halved to Rs 11.4 crore from Rs 34.9 crore in 2015-16, which came on the back of profit from its sale of investments, filings with the Registrar of Companies show.

Cash burn continued to be high in 2016-17, even though Hike managed to reduce total expenditure to Rs 227.3 crore from Rs 252.2 crore in 2015-16. Net loss for 2016-17 was Rs 215.9 crore, a tad lower than Rs 217.3 crore in the previous financial year.

In 2016, Hike touched $1.4 billion in valuation. The company is acquiring more customers, but it will find difficult to sustain itself for long if it can't generate revenue.

*The article has been updated to include the outlook for Zomato and Paytm.

*The article incorrectly mentioned Hike's monthly active users and has been updated accordingly.

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