The startup ecosystem in India has not only matured, but is thriving.
India now ranks third in the world with the most unicorn startups, according to a recent Hurun India study. Until last year, the spot was held by the UK.
According to the Hurun research, India now has 54 unicorns, or an unlisted company with a market value of $1 billion or more, 33 more than in 2020, while the UK has 39 unicorns, 15 more than a year ago. Investors in India spawned 42 new unicorns in 2021, with these companies raising over $12.5 billion, according to VCCEdge, VCCircle's analytics and research platform.
People Matters spoke to Vijay Kumar, CEO and Principal Officer, Digit Insurance, a new-age general insurance company and India’s first unicorn of 2021 to gather insights on what it takes and means for a startup to be a unicorn and the challenges one can expect along the way.
An industry veteran with more than 40 years of cross-functional expertise across industries, Vijay Kumar, along with a young and dynamic team, played a vital role in using tech to simplify insurance products and turning the company into a unicorn within a span of three years. He started his professional journey in the Insurance sector with Bajaj Allianz General Insurance Co. Ltd as part of the start-up core team and has more than 20 years of insurance expertise.
Here are excerpts from the interview:
How did it feel to be 2021’s first unicorn?
We take this as a milestone and not a destination. It was a recognition of all the effort that the team put in, and a validation of the fact that our mission is making a difference. Now that it has been about a year since we became a unicorn, the aim is to remain focused on our goal. We have a vision, and we want to continue progressing towards achieving it while the vision itself keeps evolving into something bigger and more meaningful.
What does it take to climb the mountain, be a unicorn? What challenges can one expect along the way?
Choosing a mission and abiding by it is the key ingredient of achieving a desired goal. At the same time, being flexible and adapting to external changes is important.
Choosing the right team who believes in the company’s values, in our case ‘Questioning the status quo’ and ‘Being transparent’, was key. We were able to build a young team with individuals who came with varied work experience across various industries. Also, our partners have been our backbone and have supported us immensely, irrespective of the fact that we are a fairly new company. From our end, we extended full support through leveraging technology and offering self-service modules, digitising their everyday processes, in turn, helping them become more efficient.
We were also well-positioned due to the support of stable and seasoned investors from the very start. We are, therefore, fortunate that capital was never a challenge for us.
From a product point of view, we have focused on building products that we would buy for ourselves. We are constantly keeping a hawk’s eye view on gaps that need to be filled in order to come up with relevant products. For instance, given the need of the hour during the pandemic, we launched India’s First COVID-19 insurance product and later a group Covid insurance product.
Our continued focus on offering quality service has been the key reason behind our success so far. We ensure that our customers are given the best experience. This is enabled by way of digital tools such as the self-service model through WhatsApp and our website. We received more than 7.5 lakh requests through WhatsApp till the end of November 2021.
Becoming a unicorn is not as unique as it used to be, but should it still be a startup’s goal?
Startups are typically born when founders find problems that need a solution. Given the exposure that today’s world offers, it’s an exciting time for founders who come with a strong vision. Today we have a whole new breed of founders working round-the-clock to build companies that are focused on creating value for their customers as well as investors.
Given this fact, it is only obvious that more startups will continue to attract investors’ money and eventually create more unicorns. One may believe that becoming a unicorn today is easier than before but the truth is, it demands the same kind of effort and perseverance as before. Except, founders today have better and newer avenues to raise money, in turn helping them attain the unicorn status relatively sooner.
In my view, a startup should focus on creating value for its stakeholders and the status of unicorn will follow. To work only with an aim of becoming a unicorn could result in negligence, harming the business in the long term.
Do priorities and strategies change after one becomes a unicorn? If yes, how?
As companies grow, strategies change, and this is irrespective of whether you are a unicorn or not. Unicorns typically may not be geared for slow and steady growth, but in our case the strategy for long-term growth is to innovate and not be reckless.
For instance, the pandemic tested our internal locus of control. Despite the challenging external factors, we prioritised focusing on what we could do within the company to tide over the impact of the pandemic. We launched India’s first Covid insurance product, devised an ecosystem to ensure zero-touch claims, and kept a check on our loss ratio instead of following the herd. All of this helped us achieve a growth of 44% last year, while the industry grew at only 5%.
What are the challenges you face now?
To meet the benchmarks, we have set for ourselves and also to meet the expectations our partners, customers and employees (who are also our stakeholders) have from us.
These expectations can be met by continuing to innovate on the product front, which is challenged by the unpredictable external environment -- given the pandemic and natural calamities that we are seeing around us.
These expectations also need us to keep simplifying our processes for our partners and customers, by empowering them with better and advanced technology. The challenge here is to grow a good crop of tech talent. Given our flexibility that comes with being 100 per cent on the cloud, we have been able to work across the country with good talent through hybrid work models.
In addition to this, keeping the team grounded (given our steep success) is important as I believe we have only scratched the surface of simplification.