Bengaluru: The pecking order of unicorns, start-ups that are valued at $1 billion and above, is changing rapidly with online retailers making way for start-ups in other sectors, even as they achieve unicorn status in record time. Year to date, five new companies have entered India’s unicorn club— Swiggy , PolicyBazaar , Freshdesk, Udaan and Oyo . Except PolicyBazaar and Freshdesk, all the others were founded after 2014. Udaan, a marketplace for businesses, was launched in late 2016, taking less than two years to become a unicorn.

Earlier this year, the largest Indian internet start-up, Flipkart, was acquired by Walmart. Currently, Paytm is India’s most valuable start-up, valued at $10-12 billion.

The introduction of 4G services by Reliance Jio Infocomm Ltd in 2016 led to an explosion of mobile connectivity with greater speed and consistency, opening up a larger market of consumers for internet start-ups.

“The reason why start-ups are taking less time to scale up is because we now have a much larger market than we did four years ago—from 200 million internet users in 2014, we now have nearly 500 million users," said Ritesh Banglani, partner at Stellaris Venture Partners. “In that period, there has also been an evolution of internet users and the group of users who started using the internet back in 2014-15 are now more regular transacting consumers, who order a complex variety of products and services online. Ten years ago, we barely had a couple of companies that had a user base of more than 1 million. Now, there are more than a dozen such companies," he said.

Banglani expects companies to grow faster. Apart from the accelerated speed of growth, new entrants to the unicorn club show that business models other than e-commerce are finding favour with investors.

Only one out of the five— Udaan—is a commerce platform. Earlier, the unicorn club was dominated by e-commerce firms such as Flipkart, Snapdeal and ShopClues. Now, as the internet boom goes mainstream, sectors such as food and groceries delivery, financial technology and content are attracting massive amounts of capital. Several other start-ups such as BigBasket, ShareChat, BookMyShow and Rivigo might become unicorns over the next few quarters, investors said. This follows a dry spell of two years that began in early 2016, during which only two start-ups entered the unicorn club.

“Unlike 2014-15, when e-commerce was the hottest sector, the market is much more broad-based now," said Anand Lunia, founder of early stage investment fund India Quotient. “What we’re seeing is a maturity of internet consumers and, more importantly, the kind of transactions that are taking place now. They’ve moved on from the days of heavily discounted e-commerce to other platforms where they are spending significantly, without being incentivized by crazy discounts. So, the order has changed because of this consumer maturity."

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