Queen’s Gambit: Playing the odds and winning the Unicorn Race
The pandemic may have slowed down economic growth in India, but it has undoubtedly accelerated the growth of the Direct to Consumer (D2C) sector. One of the biggest beneficiaries of this accelerated growth was Licious, the 29th company to achieve unicorn status in 2021 alone and the first one to achieve the same from this sector.
Cred, another company that entered the unicorn club this year, was founded in 2018 by Kunal Shah. The fintech start-up, known for its strong advertising game, raised a total of $547 million this year alone and saw its valuation rise to a whopping $4.01 billion, from $800 million earlier this year.
These companies form just a few among the 41 companies that have entered the unicorn club so far in 2021 alone, a stark increase from the previous year which saw 11 entries. This only begs the following questions: How did these companies make their valuations soar so quickly? How did they create value for their consumers in today’s economy?
What is their story and what does the future look like for them?
Licious, for instance, truly listened to what their consumers needed. They were able to overcome two of their consumers’ most significant challenges in this industry: unsanitary local markets and an unpleasant meat buying experience. Inspired by the farm-to-fork model, Licious coordinated the whole back-end supply chain from acquisition, processing, and storage to consumer distribution, thereby ensuring the quality and freshness of each product. Soon, they were able to change the way consumers experienced meat purchasing.
The Abhay Hanjura and Vivek Gupta brainchild recently secured $52 million in the Series G funding round headed by IIFL Asset Management (AMC), making it the highest-funded start-up in the fresh animal protein industry. They intend to develop Licious into a sustainable business that will redefine the animal protein sector in India.
Licious, like most start-ups, took years to boost profits and finally reached an inflection point when they could be valued at $1 billion. Cred, however, happens to be an outlier as one of those start-ups that continues to garner significant funding even while recording mammoth losses. Despite this, Cred has received a total of $700 million in funding so far, making it the sixth Indian company to enter the unicorn club in 2021. So, what really is it about Cred that has investors backing them to the hilt, despite the circumstances?
Start-ups are created with brilliant, yet simple ideas that can help people meet their needs. Kunal Shah saw an opportunity to focus on something unique and dependable, and who better to target than the top 1% of the population? Through the Cred app, he aimed to provide customers with the simplicity and convenience of paying various credit card bills from a single platform. With the industry expected to grow at a CAGR of 25% for 2020–2025, Kunal Shah says “While valuation is a milestone that many celebrate, we view it as a responsibility and an opportunity to create member value.”
Mobile Premier League (MPL), like Cred, also achieved its unicorn status in a short span of time by creating great value for its consumers. Founded in 2018, MPL offers skill-based games that offer cash prizes on victorious completion by linking up the MPL account with one’s UPI or bank account.
Elaborating on the reasons for its soaring evaluation, co-founder Sai Srinivas said “I think a large part of the valuation increase has to primarily do with the potential that MPL has. We are not a single country and category player. Over the next four to five months, I think our number one goal is to prove that we can scale and scale the US meaningfully”. He also added that the US has seen rapid growth and that if current trends continue, the US will overtake India as the largest economy for online gaming in the next 12 to 18 months.
If these three unicorns share one thing in common, it is their strong marketing game. Cred definitely needs no introduction on this front, with their wacky advertisements starring Rahul Dravid, Jackie Shroff, Kapil Dev and Jim Sarbh among other stars, going viral. Licious brings its fair share of quirky advertising to the table as well with Anil Kapoor and Arjun Kapoor squabbling hilariously over their meat. MPL has been in the limelight since their associations with IPL teams (KKR & RCB) and the reality show Bigg Boss in 2020. More recently, they signed a sponsorship deal with the BCCI as the official kit sponsor of the Indian Cricket Team until 2023, under the brand name of “MPL Sports”.
It has become quite clear that a funding spree for start-ups is ongoing in India. A country that had produced just one unicorn per year between 2011 and 2014, has managed to produce 41 unicorns so far this year alone. This trend reflects on India’s maturing start-up ecosystem and investors’ growing confidence in this ecosystem. With India being touted to become the 3rd largest consumer market in the world by the end of this decade, any new business that strives to provide value to its consumers will only stand to profit tremendously and be backed by investors, a fact that Cred, MPL, and Licious can definitely attest to.
Author: Sukriti Saxena
Editorial and Digital Marketing Team, NjM
Class of 2023, NMIMS Mumbai
Creatives: Parv Rastogi
Creatives Web & Promotions Team, NjM
Class of 2023, NMIMS Mumbai
