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More Than Unicorns: Why India’s Startups Need Stronger Foundations

Masum Ali Published Jun 22, 2025, 04:34 PM Updated Sep 17, 2026, 08:11 PM

India’s startup scene is at a turning point. While the country has produced 119 unicorns and earned global attention, experts and investors are raising concerns that chasing billion-dollar valuations isn’t enough. The real challenge now is building startups that are sustainable, trans...

Key Highlights:

Profitability Over Vanity: Less than 20% of Indian startups are profitable, and many only reach profitability after going public. Sectors like hyperlocal delivery often see expenses outpacing revenues, leading to recent funding slowdowns and valuation markdowns for several high-profile companies.

Credibility and Transparency Issues: Startups such as Byju’s and BluSmart have faced scrutiny for allegedly inflating metrics or hiding costs, sparking a credibility crisis. Investors and boards are being urged to look beyond pitch decks and spreadsheets, focusing instead on real business fundamentals like margins, churn, and payback periods.

Governance Gaps: Recent scandals, including the BharatPe case, highlight the risks of weak corporate governance. There’s a growing call for startups to adopt stronger internal controls, independent board structures, and regular audits to ensure accountability and avoid founder-centric decision-making.

Sustainable Growth Models: The ecosystem is shifting its attention from unicorns to “camels”—startups that are resilient, transparent, and built for the long haul. Early exits and capital-efficient businesses are being celebrated as much-needed alternatives to the unicorn narrative.

Policy and Investor Shifts: Regulators are being asked to mandate more disclosures, especially for startups eyeing public listings. Investors are encouraged to conduct deeper due diligence, including culture audits and operational stress tests.

The Road Ahead: For India’s startup ecosystem to mature, it must prioritize authentic value creation, sound governance, and a willingness to celebrate disciplined, mid-sized successes—not just billion-dollar dreams.

India’s next chapter in innovation will be defined not by how many unicorns it creates, but by how many enduring, well-governed companies it builds.

Source: Outlook Business

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