Bengaluru startups face heavy losses despite unicorn boom

Bengaluru, India's leading startup hub, is home to over 40 unicorns valued at more than $1 billion. However, in the fiscal year 2024, nearly 95% of these startups, including publicly listed firms, reported cumulative losses of ₹16,389 crore, as per data from Tracxn. Some startups were not included due to unavailable financial data.

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Only seven unicorns—Zerodha, Postman, Moneyview, Perfios, Zeta India, Razorpay, and Groww—turned profitable, collectively posting a profit of ₹6,209.6 crore. Zerodha led the group with a net profit of ₹5,496 crore.

To boost Karnataka’s startup ecosystem beyond Bengaluru, the state government allocated ₹1,000 crore in its budget for growth in Mysuru, Mangaluru, Hubballi-Dharwad, and Kalaburagi. This includes ₹300 crore for a Fund-of-Funds and ₹100 crore for deep-tech development.

Despite their high valuations, major Bengaluru-based startups continue to incur losses. Zepto reported a ₹1,248 crore loss, Cred ₹1,644 crore, Ola Electric ₹1,584 crore, and Curefit ₹888.5 crore in FY24. Mumbai-based unicorns, including MyGlamm, PharmEasy, and boAt, collectively lost ₹3,886.91 crore. Meanwhile, profitable unicorns like BillDesk, Dream11, InCred, BrowserStack, CoinDCX, and Upstox managed to stay ahead.

In Delhi-NCR, over half of the 30 unicorns, including Paytm, Physics Wallah, and BharatPe, saw combined losses of ₹6,228.45 crore.

Venture capital funding rebounded in 2024, reaching $13.7 billion, with consumer tech, SaaS, and fintech attracting the majority. Experts emphasize the need for startups to prioritize profitability over valuations to ensure long-term sustainability.