On April 16, the Maharashtra Transport Department dropped a regulatory bombshell:121 Ola Electric showrooms were found operating without trade certificates, a basic legal requirement for selling vehicles. The aftermath was swift—109 show-cause notices issued, 75 showrooms shut down.
This wasn’t a clerical error—it was a governance failure at one of India’s most celebrated electric vehicle unicorns. And it arrives on the heels of other high-profile breakdowns: BluSmart Mobility’s financial irregularities and the slow-motion collapse of Byju’s.
The pattern is becoming hard to ignore. India’s startup boom may be booming—but is it built to last?
The Unicorn Illusion: Valuation Without Validation
India has earned its spot as the world’s third-largest startup ecosystem, with 117 unicorns leading the charge. But scratch beneath the surface, and an uncomfortable truth emerges: 101 of these unicorns hold zero patents.
According to the Indian Patent Advanced Search (IPAS) System, this entire unicorn cohort collectively owns just 229 patents, with 63% of them concentrated in Ola Electric and Ather Energy. That’s not innovation at scale—it’s valuation inflation.
Too many startups are chasing headlines, not hard problems. They scale quickly on the back of VC money, not market validation. Consumer apps dominate, while sectors like agritech, healthtech, and climate-tech remain underfunded and undervalued.
This startup culture celebrates speed, not substance.
The Real Metrics: Profitability, IP, and Purpose
India doesn’t just need more startups. It needs better startups—ones that build intellectual property, solve systemic problems, and stay profitable without perpetual investor support.
Let’s shift the narrative:
- From unicorn status to profit status.
- From funding rounds to market relevance.
- From user acquisition to user retention.
- From IPO dreams to sustainable operations.
The true test of a startup is not its valuation, but its ability to survive, scale, and stay meaningful in the long run.
Don’t Let a Few Scandals Taint the Many Builders
To be clear, the ecosystem is not rotten. It’s evolving.
From under 10,000 DPIIT-recognised startups in 2014, India now boasts nearly 1.6 lakh startups as of April 2025. These businesses have generated $350 billion in value and employ over 1 crore people.
Since January 2024, only about 20 startups have faced governance probes—just 0.013% of the ecosystem. That’s not a crisis; it’s a wake-up call.
Most founders are builders, not frauds. They are crafting real solutions, often under immense pressure, without glamour or headlines. When scandals erupt, it’s these honest entrepreneurs who bear the brunt of public cynicism.
What India’s Startup Ecosystem Needs Next
If India wants to lead the world in innovation, it must grow out of its obsession with valuation. What’s needed now is a cultural and institutional reset:
- For founders: Build deep, not just fast. Solve real problems. Focus on resilience.
- For investors: Demand transparency. Push for patents. Reward long-term value.
- For regulators: Be proactive, not reactive. Strengthen oversight without stifling growth.
- For media and public: Celebrate the slow, steady builders as much as the flashy unicorns.
The New Startup Mantra: Validation Over Valuation
India’s startup story has reached a crucial juncture. To move forward, we must stop chasing the next billion-dollar company—and start building the next billion-dollar solution.
This is no longer just about innovation. It’s about credibility.
It’s no longer just about disruption. It’s about durability.
It’s no longer just about scale. It’s about substance.
Let’s mature our metrics. Let’s rewrite the playbook. And most importantly, let’s ensure that India’s startup revolution lives up to its promise—not just in numbers, but in impact.
