Unicorn startup

2022 SEP 6

Preliminary   > Economic Development   >   Indian Economy and Issues   >   Economic growth

Why in news?

  • Recently, the government of India has stated that India ranks 3rd globally in terms of the number of Unicorns.

What is a unicorn startup?

  • Unicorns are privately held, venture-capital backed startups that have reached a value of USD 1 billion.
  • The valuation of unicorns is not expressly linked to their current financial performance, but largely based on their growth potential as perceived by investors and venture capitalists who have taken part in various funding rounds.

India’s current status:

  • In May, 2022 Prime Minister praised India’s startup ecosystem as he highlighted that the country has reached a landmark figure of 100 unicorns
  • 44 unicorns were established in India last year during the pandemic.

PRACTICE QUESTION

In the context of Indian economy, ‘Unicorn startup’, is defined as:

(a) A startup firm whose majority share is held by state or central government

(b) A privately owned startup firm with a market capitalization of more than USD 1 billion.

(c) An inactive startup used as a vehicle for various financial manoeuvres or kept dormant for future use in some other capacity

(d) A start-up firm operating in sunrise industries

Answer