saas startups: SaaS pips fintech as largest unicorn creator in 2022: Orios

A sudden and surprising momentum helped software-as-a-service (SaaS) dethrone fintech as the sector that produced the greatest number of unicorns in a year in the country in 2022, early-stage venture capital fund Orios Venture Partners said on Tuesday.

However, many of the SaaS unicorns reached the coveted $1-billion valuation on the back of inflated price-to-valuation ratios, Orios managing partner Rehan Yar Khan told ET.

The market started to correct from February and March onwards when negotiations about valuations started getting strict, he said.

24 new unicorns in 2022_Graphic_ETTECHETtech

“What I would certainly do is, I would check the top lines of these companies,” Khan said. “I think what surprised me was that these companies are not very large and then suddenly they were all unicorns.”

He drew a parallel with the US where Nasdaq had new-age technology companies turning big valuation wise on small revenues with 40x and several hundred times multiples.

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“I think that is the story with the unicorns and I think it won’t end well if you ask me,” Khan said, adding that he was surprised “that suddenly all these small companies were unicorns”.

Hasura, Lead School, Darwinbox and Leadsquared are some of the software startups that reached unicorn status in 2022.

SaaS, fintech dominated unicorn club in 2022_Graphic_ETTECHETtech

Apart from how SaaS produced six out of 24 unicorns in 2022, other top findings of Orios’ ‘India Unicorns and Exits Tech Report 2022’ included startups having raised a total of $25 billion in 2022, one out of 13 unicorns globally was born in India, and that the year also saw 229 acquisitions and four technology public listings.

The year’s fastest unicorn was Blockchain startup 5ire, which took only 11 months to turn unicorn through its July 2022 round of $100 million funding after raising a seed round of $21 million in October 2021. The slowest was diagnostics company Molbio, founded in 2000, which raised $85 million in September 2022.

Mumbai-based Orios last raised $30 million in additional capital to exclusively back its high-growth, standout portfolio companies in June 2021. Its portfolio companies include gaming company Zupee, agritech company Krishify, online pharmacy PharmEasy, direct-to-consumer brand Country Delight, online car servicing firm GoMechanic, and EV-battery-as-a-service company Battery Smart.

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