Earlier this month, India birthed a new startup unicorn when edtech player Unacademy raised a US$150 million funding round at a post-money valuation of US$1.45 billion. 

In another day and age, minting a new unicorn would itself have been a cause célèbre. Today, however, startup unicorns are seemingly as common as your favourite garden-variety equine animal—there are more than 500 such companies globally and 31 just in India 31 just in India Venture Intelligence Venture Intelligence Unicorn Tracker Read more

That said, this funding round is noteworthy for two reasons.

For one, the pandemic is reshaping the world in ways that we are still trying to comprehend. Entire industries are being reset and the vast majority of startups are fighting existentialist battles—laying off employees, trimming costs, and freezing new hiring. Against this backdrop, what does a startup acquiring unicorn status tell us about the company and the broad category itself?

For another, this round is notable for the lead investor—Japanese conglomerate, SoftBank.

When SoftBank launched launched The Ken Will SoftBank’s Vision Fund turn us blind? Read more its ambitious Vision Fund with a US$100 billion corpus a few years ago, it threatened to upend the bounds and norms of technology investments. The fund stood out not only for its cheque size but also for the size of its ambition. It made huge bets on dozens of unproven companies in sectors ranging from ride-hailing to real estate. 

At first, it seemed that SoftBank’s bets were paying off with big returns  from companies like e-commerce platform Flipkart and precision oncology-focused Guardant.

Then, disaster struck.

A chastened 800 lb gorilla

The year 2019 was annus horribilis for SoftBank in more ways than one. The unravelling of its US$10 billion bet in co-working startup WeWork triggered the largest loss in SoftBank’s history. The stock price of ride-hailing unicorn Uber, one of the fund’s largest bets, dipped below its IPO price from the previous year. 

The media carried multiple stories about internecine battles within SoftBank’s top brass. Activist shareholder Elliott Management got on board the SoftBank ship and called for greater scrutiny and governance. From a point where every large startup saw SoftBank as a dream investor, the broad perception quickly deteriorated to the point that many people saw SoftBank’s name on a startup’s cap table as radioactive. Vision Fund II, SoftBank’s ambitious sequel to its original US$100 billion debut fund, also seems to have hit road bumps.