The Rush to Hit Primary Markets is Decimating Unicorn Birthrates

Startups are sprinting toward public offerings—and killing billion-dollar valuations in the process.

The IPO Frenzy Backfire

Companies that might've matured into unicorns are getting shoved into the spotlight too early. They're launching on primary markets before proving sustainable models, before securing loyal user bases, before anything resembling long-term viability. The result? A stark drop in new billion-dollar beasts.

Short-Term Wins, Long-Term Drought

Everyone wants a piece of the next big thing—VCs, retail traders, even your aunt who just downloaded a brokerage app. That hunger fuels rushed listings. Firms skip crucial growth phases, opting for quick liquidity over lasting impact. It’s the financial equivalent of harvesting crops before they’re ripe—you get more produce now, but you ruin the soil for next season.

Finance’s favorite irony: in the race to create value, they’re incinerating it faster than a meme coin on margin call.

Valuation tiers

Unicorns are companies that command a valuation of $1 billion, while gazelles have valuations between $500 million and $1 billion and are expected to be unicorns in 3 years. Cheetahs are companies with valuations between $200 million and $500 million that become unicorns in five years.

About 16 start-ups were downgraded from unicorn status, underlining the pressure on sustaining growth at scale. Interestingly, 11 have joined the unicorns list and five have gone public on stock exchanges.

Drop-offs from the list have accelerated sharply, rising from just eight in 2022 to 39 this year, indicating intensifying competition and market pressures.

On the upgrade side, cheetah-to-gazelle transition remained steady at 11 this year, while gazelle-to-cheetah downgrades fell to five after hitting 12 last year.

Moreover, the ban on real-money gaming start-ups such as Dream11, MPL, Gameskraft, Games 24x7, Zupee and WinZO has forced them to exit the list due to the ban on real-money games.

The 10 start-ups that became gazelles include Rapido (valuation of $3 billion), Navi Technologies ($1.7 billion), Netradyne ($1.4 billion), Vivriti Capital ($1.3 billion), Moneyview ($1.2 billion) and others with $1 billion valuation, including Jumbotail, Drools, JusPay, Veritas Finance and DarwinBox.

Funding surge

While fintech led the list, new entries span mobility, autotech, ecommerce, SaaS and consumer goods.

Among gazelles and cheetahs that tapped the market include Northern Arc, Ather Energy, Smartworks and Bluestone.

In all, 20 unicorns and other start-ups are gearing up to raise ₹52,200 crore from the primary markets. Groww tops the list with plans to raise ₹8,500 crore, followed by InCred Finance (₹5,000 crore), Fractal Analytics (₹4,900 crore) and PhysicsWallah (₹4,500 crore).

Consumer-focused players such as Meesho (₹4,250 crore) and Lenskart (₹2,150 crore) also highlight strong demand in e-commerce.

This apart, Continuum Green Energy (₹3,650 crore) and Rayzon Solar (₹1,500 crore) represent the growing CleanTech push, while logistics firms Shiprocket (₹2,500 crore), Shadowfax (₹2,500 crore) and Captain Fresh (₹1,700 crore) showcase investor appetite for supply-chain solutions.

Published on September 11, 2025