According to a report by TiE Delhi NCR and Zinnov, start-up funding and deal activity has recovered to pre-COVID levels in September 2020, while four Indian start-ups even became unicorns during the worst months of the pandemic. India is expected to have 60,000 start-ups and 100 companies with valuation of over US$ 1 billion by 2025

The report also highlighted that investors have placed ‘safe bets’ on start-ups this year as they continued to support late-stage start-ups, while early-stage or seed-funded start-ups saw their funding line-up fall. “More than 55% year-on-year decline in seed and early-stage funding in Q2 2020,” said the report. This had also resulted in a dip in valuations for start-ups. For founders who are in the initial stages of their journey, it seems crucial to take the cash available and be rational about the valuations that come with it.

In an interview, Ankur Mittal, Co-founder, Inflection Point Ventures recalled, “Even during the Great Recession of 2008 in the US, start-up valuations across each round for the next year had reduced by 30% on average from the previous year. But in the long run, for good businesses run by good founders, getting the right valuation is not a challenge.”

Rajan Anandan, President, TiE Delhi-NCR has also given an optimistic statement saying, “Investor sentiment has also recovered quickly, and we expect the Indian unicorn club to steadily expand through 2020 and 2021. Although COVID-19 has been a major setback for the ecosystem, we believe that the changes that the pandemic has brought on will make our ecosystem much stronger, across every dimension. India is on a path to have 100 unicorns by 2025.”

The year 2020 began with an Indian ecosystem of over 38,000 start-ups, growing rapidly on the back of a spectacular 2019. The start-up ecosystem in India had attracted US$ 14.5 billion of funding in 2019, the report titled ‘Covid-19 and the antifragility of Indian start-up ecosystem’ said. The report also said that start-ups are expected to create 1.5 to 1.6 million jobs by 2025.