Amid pandemic, while most Indian startups are struggling for funds, four have become unicorns

India’s economy has plummeted to record lows in recent months due to coronavirus-linked lockdowns. Yet, there are some bright stars in the country’s booming tech startup space.

Four Indian tech startups became unicorns, or private companies valued at over $1 billion, in the middle of the pandemic, according to a report released by consulting firm Zinnov on October 14. These ventures – online beauty products retailer Nykaa, tech firm Postman, education startup Unacademy and fintech firm Razorpay – now take India’s total unicorn count to 33.

The average time for an Indian startup to become a unicorn is roughly six years now, Zinnov said.

But beyond the big-billion club, several Indian startups are struggling because of the pandemic.

Covid-19 challenges

The virus outbreak and the nationwide lockdown that ensued have thrown up funding and business continuity challenges for many in the Indian startup ecosystem. More than half of Indian startups are struggling to raise fresh funds, Zinnov said.

The overall investment in Indian startups has been declining since April, when the coronavirus outbreak started in India.

For a handful of startups, though, the pandemic has come as a blessing in disguise.

Startups that benefitted from Covid-19

With schools, colleges, and other educational institutions shut due to the pandemic, online education has caught on like wildfire in India.

Indian ed-tech startups have seen their paid users more than double this year.

This trend has brought a funding boom for the ed-tech segment, Zinnov said.

The pandemic has also accelerated the growth of digital payments and digital healthcare.

“Digitally-led segments have recovered much faster than anyone expected and in many spaces, demand is well ahead of pre-Covid levels,” said Rajan Anandan, president of TiE Delhi-NCR, a global not-for-profit organisation. “Investor sentiment has also recovered quickly and we expect the Indian unicorn club to steadily expand through 2020 and 2021.”

Meanwhile, the companies that have had to endure the severe impact of the pandemic belong to the travel and hospitality sector. Suspension of international travel and various restrictions on domestic travel along with the scepticism among the consumers have hit the companies much harder, and the recovery seems quite hard in the near future, noted the Zinnov report.

This article first appeared on Quartz.