BS EDIT: Taming the unicorns: The need for institution building

By Business StandardPublished On Oct 16, 2024

Growing unicorn ecosystem

India is now the world’s third-largest startup ecosystem, boasting 111 unicorns with a combined valuation of $349.67 billion

The drive for expansion

India’s unicorns often prioritise rapid expansion to maintain investor interest.

This growth imperative sometimes sidelines the basics: stability, regulatory compliance, and robust systems

Setbacks for leading startups

High-profile startups like Paytm and Ola faced regulatory setbacks due to oversight issues, with Paytm barred from deposits and Ola receiving multiple notices

Erosion of shareholder value

When internal structures are weak, shareholder value can erode quickly.

Startups dependent on founder vision alone may struggle if they lack discipline and fail to build resilient management frameworks

Lessons from Byju’s, BharatPe

Byju’s rapid expansion strained finances, and BharatPe faced founder issues. Both highlight the need for checks, balances, and a professionalised board

A call for institutional strength

As Indian unicorns aspire to become decacorns, they must embrace institution-building.

Developing robust systems and governance will be key to sustaining growth and enhancing resilience