The Rise of Unicorns and Their Impact on Pre-IPO Valuations



The term "unicorn," once commonly recognized and what we can say in simplest way that whimsical descriptor for privately held startups worth $1 billion or more, has gradually developed from a mythical rarity to a common phenomenon in the Indian investment panorama.

This proliferation has dramatically reshaped the pre-IPO valuation panorama and the diverse pre-IPO landscape, and that being said it has introduced unparalleled opportunities and precise unique challenges for companies, investors, and the wider financial ecosystem.

The Evolving Landscape of Indian Unicorns

The Indian unicorn landscape continues to thrive and rise consistently, representing growth year by year in terms of the number of unicorns established, driven by innovation across diverse sectors. As of May 2025, India ranks in number third worldwide in terms of unicorns to be counted. Currently, India is home to 118 startup unicorns, together worth $354 billion.

According to the Nasscom document and report released recently, India added and inclusive of six new unicorns in 2024, the second-highest number globally compared to other pinnacle within tech startup ecosystems. This delivered India's general and aggregate unicorn count to 118. Another document states that 5 new unicorns emerged in H1 2025, bringing the overall and cumulative recall count to 123 unicorns.

These six startups blanketed Moneyview, Ather Energy, Rapido, RateGain, Perfios, and the AI-targeted Krutrim AI. Krutrim AI was the first unicorn and number one to become the unicorn path of 2024, accomplishing a $1 billion valuation in January after raising $50 million. RateGain, another second new-age company turned into a unicorn club in February 2024.

Then further speaking, Perfios achieved and marked a unicorn recognition in March after raising $80 million. Ather Energy also became a part of this wave in the month of August and successfully raised ₹596 crore ($71 million). Another startup was Rapido, a player within the mobility segment that gained a unicorn status in September and raised $120 million (over ₹1,000 crore) at a post-money valuation of ~$1 billion. Lending corporation Moneyview also gained a unicorn listing in September 2024 amounted to $1.2 billion.

H1 2025 Additions to Unicorn Club

If we speak about the initial present first half year of 2025 alone there are five new unicorns galloped into the elite club in terms of unicorn status. These covered Jumbotail, Drools, Porter, Netradyne, and Juspay. Jumbotail, a B2B grocery platform, became India's fifth unicorn of this current year that has already raised $120 million in Series D funding. It's worth noting that one official report suggests two unicorns emerged in H1 2025 which leads to nearly a 33% decline from three unicorns in H1 2024.

Interestingly, these new unicorns weren’t simply the standard patron consumer tech or fintech players. Startups in EV infrastructure, agritech, deep tech, or even climate-targeted sectors made it to the billion-dollar club and membership. The diversification indicates a maturing ecosystem that’s no longer betting simplest only on flashy valuations but on companies solving real, large-scale problems and challenges.

The funding paradox

Fewer unicorns suggest decreased or lower valuations. But it truly is not precisely the case.

Despite overall VC funding in India dropping to ~$20 billion in the year 2024 (down from $35 billion in 2021), the focused perspective is that on average valuation of late-stage level startups went up. According to Tracxn’s India Tech Report 2024, startups raising Series D and past beyond had been commanding valuations 20–30% better and higher than in 2021–22.

Why? Investors have shifted their focus toward exceptional quality over quantity. Rather than writing small checks for several experimental ideas, they may be doubling down on mature, revenue-generating and producing companies with clear paths to profitability. This shortage of high quality sophisticated late-stage deals has created an artificial valuation push, particularly for startups gearing up for IPOs.

Pre-IPO hype: The valuation Premium

Let’s observe some outstanding and prominent examples from 2024 and early 2025.

Ola Electric, which filed for IPO in late 2023, noticed its valuation within the private marketplace leapt and soared to almost $6 billion, even as it reported widening losses. Similarly, the startup known for kids FirstCry’s valuation soared to $3.5 billion ahead of its further delayed IPO. MobiKwik, after its failed IPO attempt in 2021, came back stronger and more potent, raising price funds at a valuation of over $1 billion in 2024 to prepare for another listing attempt.

This phenomenon is what industry insiders named the “pre-IPO premium.” Investors regularly pile in throughout pre-IPO rounds with the hope of brief and quick listing profits, developing transient and temporary valuation spikes that don’t always replicate fundamentals.

In India’s case, this pre-IPO premium has been further exaggerated because of limited large-cap tech IPOs due to Zomato's blockbuster debut in 2021. With investors sitting on dry powder and retail investors yearning and craving new-age tech shares, private valuations are often driven beyond realistic levels and tiers.

How unicorn valuations affect IPO pricing

Here’s the complicated and tricky component. High private valuations make IPO pricing a delicate balancing act.

When a unicorn with a $5 billion private valuation desires to go public, it desires to justify this rate tag to the wider public market, which is far greater valuation-touchy and expects solid profitability metrics. Overvalued unicorns either ought to list at a reduction or delay their IPOs altogether.

For instance, OYO Rooms has again and again postponed its IPO plans since 2022, reportedly because of valuation mismatches and vulnerable market sentiment. Its remaining last private valuation was over $9 billion, however public marketplace analysts peg its much lower decrease, around $4–5 billion, primarily based on current financials.

Similarly, PharmEasy, once valued at $5.6 billion, had to drastically lessen its valuation to approximately $2.7 billion in the course of its 2024 rights issue because it struggled to convince investors of its profitability story.

The "growth vs. Profitability" dilemma or predicament

Another predominant issue and sort of challenge is that Indian unicorns regularly prioritize increase in any respect fees, delaying profitability.

Startups like Swiggy and Zepto maintain to burn cash to grab market percentage. While these techniques help improve top-line numbers and keep high private valuations, they don’t always translate into attractive IPO pricing.

In 2024, several unicorns have been compelled to tweak their fashions to consciousness extra on unit economics and sustainable margins before even thinking about an IPO. Investors nowadays are cautious of “increase at any value” memories after seeing how Paytm and other excessive high-profile listings initially struggled post-listing.

Are pre-IPO valuations sustainable?

The large question is whether these unicorn valuations will keep once these companies hit the public markets.

Historical facts suggest that over 60% of Indian unicorn IPOs considering the fact that 2021 have corrected underneath their issue prices at some point. However, the lessons and learnings from the facts based on corrections are slowly and gradually being absorbed.

New-age unicorns now spend greater time cleansing up governance systems, improving profitability metrics, and providing realistic roadmaps to profitability. These movements aim to align personal valuations towards what public markets are inclined to pay, decreasing the risk of sharp post-listing corrections.

Looking beforehand: A cautious optimism

The unicorn wave in India is far from over. Industry insiders trust we ought to see around 20–25 new unicorns by 2026, pushed with the aid of fintech improvements, EV ecosystem expansions, and advancements in SaaS and AI.

However, we're likely to witness a more advanced measured increase, with investors turning into selective and demanding higher financial disciplines. Many big funds, such as international giants like SoftBank and Tiger Global, have pivoted to backing organizations most effectively only if they show clear and smooth consistent profitability paths and governance upgrades.

The effect on pre-IPO valuations could be twofold: while strong unicorns with strong basics may also still command excessive premiums, weaker startups might face steep valuation cuts or extended delays before they pass public.

Final thoughts

The upward push of unicorns has undoubtedly propelled India onto the global startup map. But as we enter an extra mature segment, these billion-dollar valuations can now not rest entirely on future growth testimonies.

For pre-IPO investors, this means greater due diligence and practical expectations. For founders, it’s a be-careful call to build sustainable, governance-targeted organizations in place of really chasing conceitedness valuations.

Ultimately, the coming years will decide which unicorns sincerely have the strength to gallop into the public markets triumphantly and which of them can also discover themselves caught within the personal paddocks, awaiting a reality to take a look at.