Fund India

7 expensive lessons I learned watching Indian unicorns fail. (Most founders ignore lesson #3)

Nikhil Kamath said something that made everyone uncomfortable.

"Most Indian unicorns aren't real businesses."

Here are the 7 expensive lessons I learned:

Lesson 1: Valuation doesn't equal value 

Ola Electric got unicorn status fast, and they’re still struggling with basic profitability.

Lesson 2: Burning cash isn't a business model 

GoMechanic raised ₹125 crores, faked revenue numbers, and shut down within months. Cash burn without clear path to profitability always ends badly.

Lesson 3: India-only thinking kills growth 

Amazon operates in 130 countries. Most Indian unicorns focus on just one market.

Lesson 4: You can't lose money on every sale forever

Zilingo and Trell aggressively burned cash to chase scale, but imploded when the line wasn't crossed. BharatPe is a reminder that loss-making isn't inevitable death, only if you're willing to course-correct.

Lesson 5: Sustainable beats spectacular

Indigo crossed ₹1,000 crore in annual revenue roughly 8 years after launch, and has delivered profits in about 12 of its 18 years.

Lesson 6: Profitable companies survive downturns 

Zomato turned profitable in Q1 2023 after 14 years. Delhivery became profitable before going public. Both survived when funding dried up.

Lesson 7: Investors now ask different questions 

Not "How fast can you grow?" but "When will you turn profitable?"

Building a unicorn in 6 months is easier than building a business that lasts 6 years is hard.

Here's what the survivors do differently: 

→ Choose profit margins over growth rates 

→ Think global from Day 1 

→ Build products people pay for, not just use

Nikhil Kamath suggests founders should stop chasing unicorn status and start chasing sustainable growth.

The companies that survive funding winters are the ones that never needed funding to survive.

Are we celebrating the wrong things in Indian startups?