Unicorns or Pegasus – Who Takes Home the Trophy?

In India, there are around 30 unicorn startups – a term of endearment given to those startups which are valued at $1 billion or more. These companies have a collective valuation of nearly $110 billion.These startups have primarily raised funding over the last decade or so. Fascinating numbers, indeed. But shockingly, none of the unicorn startups have made profit till date.

Personally, I am not against those unicorn startups. It’s a well known fact that some of the unicorn startups have revolutionized the industries in which they operate. However, these startups tend to focus more on rapid growth rather than on profitability. They operate with a single minded, razor sharp motto of “Acquire or get acquired”– the startup equivalent of “Eat or be Eaten”.

So, in this rat race for blind survival, sustenance and being alive till such acquisition, becomes crucial for these companies. The value creation for the investors of these startups does not happen through profitability but through acquisitions by way of buyouts where they take home millions of dollars.

However, on the other hand, there are companies like Zerodha (the newest entrant to the unicorn club) and Happyfox which are at the helm of creating a new breed of startups in India which are self sustaining and they are completely bootstrapped.

Zoho Corp, one of the most popular software and CRM companies in the world,  has been following this pursuit – of being profitable and bootstrapped –and has been immensely successful so far.

Zerodha recently announced buyback of the ESOP shares of its employees amounting to INR 200 crores. It has not received a single round of funding and the buyback is totally out of the profits of the Company. Daring move at a time like this, right?


Enter: Pegasus Startups – It is a company which generates profits and reinvests those profits for further growth and also skips multiple rounds of funding.

Why does India need more Pegasus startups?

1. Organic growth as opposed to the inorganic growth of unicorn startups which goes bust within a short span of time. (Classic example is the now infamous WeWork)

2.  Healthy business environment — Unicorn startups spend a significant chunk of their funding towards marketing. In that case, the cost of acquiring a customer is more than the recovery from that customer.

3. IPO readiness — Pegasus startups are more eligible in getting listed on the Indian stock exchanges than the Unicorn startups which do not have a very good track record when it comes to profitability- which is something the Indian public loves to look at. It’s a fact that not many people invest in the stock market for the long term returns- investors prefer getting rich and getting rich quick. Pegasus startups definitely seem more attractive to them.


Over the years, there have been cases where unicorn startups have collapsed overnight due to shortage of capital. But in the case of Pegasus startups, the road to recovery, in the adverse case of capital shortage, will not be a rough journey since from the time of inception, they have been 100% “aatmanirbhar or self reliable.

There have also been special, one-off cases like Snapdeal where they have turned around and became Pegasus startups by boosting their profitability.

What I think is that in the pre-COVID world, unicorn startups got most of the limelight. However, post-COVID, Pegasus startups will be able to hold down their fort and it’s their time to shine.

To know more about Pegasus and how you can take your startup there, connect with us. Follow our Social Media handles for latest updates.

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