UNICORN: Creature of the new millennium

In mythology, the unicorn is a horse with a single spiraling horn that sprouts from its forehead. It is a very elusive creature with mystical and magical powers and symbolises purity and grace. In our tech-dominated world, the unicorn is an altogether different beast.

By Ajith Pillai

In mythology, the unicorn is a horse with a single spiralling horn that sprouts from its forehead. It is a very elusive creature with mystical and magical powers, symbolising purity and grace. 

In our tech-dominated world, the unicorn is an altogether different beast. It is not always graceful, nor mystical, like its mythological counterpart, because it is often ridden by a brash, brazen, disruptive, media-savvy, not-always-ethical creature on the make. In purely financial terms, a unicorn is a startup venture—an unlisted, recently created company valued at one billion dollars or more, which utilises information and communication technologies to promote its products or services. 

It is a creature of the new millennium. 

Interestingly, in 2013, venture capitalist Aileen Lee coined the term ‘unicorn’ to describe startups that have reached a billion-dollar valuation, believing it would be a rare phenomenon. She was wrong. Today, there are close to 800 unicorns in the US, many in Silicon Valley. India reportedly has over 100 unicorns. 

So, how do startups get the unicorn label? 

The valuation is often based on the prospects of a company and the market potential of its product or service rather than current revenue or assets. It is thus a subjective and speculative assessment. No official or formal body declares a startup a unicorn. Instead, the status is bestowed informally and announced through the media and trade magazines when a startup is valued at $1 billion or more by angel investors and venture capitalists. 

The primary focus of the book under review is Bhavish Aggarwal, a creator of unicorns. An alumnus of IIT-Bombay, he is the CEO of ANI Technologies Private Limited, the parent company which owns the taxi aggregator app Ola Cabs, now renamed Ola Consumer. Aggarwal was, till recently, the toast of techies and the establishment in India because he set up three unicorns before he turned 40. 

That is like bagging three Oscars in successive films. 

Added to that, his patriotic messaging, his youthful demeanour, and his commitment to making India great were music to the ears of the government and several politicians. He was the poster boy of a tech-enamoured Bharat.

According to the authors of this book, Aggarwal has an impressive track record, though the trajectory his ventures took after achieving the billion-dollar status has sparked controversy and media debate. For the record, ANI Technologies, which launched the ride-hailing app, Ola Cabs, in 2010, was declared a unicorn in 2015. Ola Electric, which promised to revolutionise EV mobility in India through its battery-run two-wheelers, joined the billion-dollar club within months of its incorporation, although, according to the authors, it did not even have a prototype of its product! And Ola Krutrim, a multilingual AI language model that incorporates machine learning to understand and generate human language, was established in 2023 and became a unicorn in 2024.   

Sourya Majumder, a PhD scholar at the Centre for the Study of Law and Governance, JNU, and Paranjoy Guha Thakurta, a seasoned print journalist, television and internet broadcaster,  author, and commentator on economic issues, have co-authored the book being reviewed, which critically examines Aggarwal’s three unicorns. 

Theirs is a hard-hitting book that is presented objectively, and the conclusions drawn are unflattering, as indicated by the book's title.

As revealed in the book, ANI Technologies started well with Ola Cabs. From less than 50 rides a day in Delhi in 2010, the app had 15 lakh drivers logging in across 250 cities by 2019.  By 2021, it was worth $ 7.3 billion and was planning to go public. It was a big success story.

To grow fast, the company had advertised that drivers who joined a scheme floated by a subsidiary company, Ola Fleet, would no longer have to lease vehicles they drove on the app. For instalments ranging from Rs 700 to Rs 1,100 a day and a refundable deposit of Rs 30,000, Ola drivers could become owners of their cars within four years. All they had to do was submit copies of their driving licence, Aadhaar and PAN cards, to drive away with a sedan. 

According to the Indian Federation of App-based Transport Workers, quoted in the book, at least 50,000 drivers signed up for the scheme and became Ola Fleet members. They were promised a better share per ride, but the company reportedly reneged on it. Worse, during the pandemic, Ola had magnanimously waived the daily instalment for 30,000 drivers and offered to ‘securely hold’ their vehicles during lockdown. However, some of them apparently discovered that their cars had allegedly been put up for auction. 

The drivers also reportedly alleged that the agreement, written in English, which they had signed with the company, did not mention ownership. Back-of-the-envelope calculations cited in the book estimate that the cab drivers paid Rs 1,000 crore per year from just the daily instalments. 

The second of Aggarwal’s unicorns, Ola Electric Mobility Private Limited, was his foray into battery-driven two-wheelers. With foreign and Indian investors pumping in money, the company achieved unicorn status within months of its incorporation in 2019. 

But where was the product that was to revolutionise EV mobility in India?

In May 2020, Ola acquired an Amsterdam-based firm that had an untested electric scooter. It became the prototype of the two-wheelers that would be manufactured at the Ola Future factory in Tamil Nadu, with an annual production capacity of 20 lakh units. 

The S1 and S1 Pro EV scooters were soon being delivered to the doorsteps of consumers. The scooters (price range between Rs 59,999 to Rs 1,44,355, depending on the model) could only be ordered online on an app for a booking fee of Rs 499. 

The public response was overwhelming. Over one lakh people pre-booked the scooters on the opening day of the sale.

However, as the authors have revealed, the success story turned sour rather quickly. Within months of the rollout of the S1 and S1 Pro models, social media was flooded with posts from irate customers demanding refunds. The scooters seemed to be untested and unfit for Indian conditions. 

Apparently, there were complaints that they heated up and stalled in traffic, their wheels popped off, the front suspension gave way without provocation, and, ironically, one complainant claimed that the scooter reversed when it was supposed to accelerate.

Ola even introduced its EV scooters into the company’s ride-hailing business, promising drivers an income of Rs 70,000 a month. The scooters reportedly failed as bike taxis because of battery malfunctions, sudden stoppages and overheating. It was at the height of consumer anger that Aggarwal had his now-infamous verbal spat with stand-up comedian Kunal Kamra, which added fuel to the fire.

The book reveals that Ola Electric is the only EV manufacturer to benefit from two government production-linked incentive (PLI) schemes—the Automobile PLI scheme and Cell PLI scheme. It also received subsidies under the central government’s FAME-Faster Adoption and Manufacturing of Hybrid and Electric Vehicles scheme. Additionally, it enjoyed incentives from the Tamil Nadu government for setting up its vehicle and battery manufacturing unit in the state.

With the buzz about Ola Electric having died down, the focus is now on Aggarwal’s third unicorn--Ola Krutrim.  It is a large language model (LLM) AI which processes huge volumes of data to understand and generate human language. 

The blocks of data the LLM processes are known as tokens. Krutrim claimed that its LLM model had been trained on two trillion tokens and is capable of understanding and generating text in 22 Indian languages. It would be India’s desi ChatGPT. 

Ola Krutrim was launched in 2023 and became a unicorn the following year. The notion in the tech industry was that Aggarwal was onto something big. However, early testing of the company’s LLM led some to suspect that the company was using open-source AI models in the market. 

Open source is a programming source code that can be read, modified and reused, provided the source is acknowledged. According to the authors of this book, Krutrim was trying to pass off someone’s work as its own.        

It has now been revealed, and the book reinforces the fact, that the company allegedly copied the open-source translation model called IndicTrans2, developed by the tech non-profit AI4 Bharat, which functions out of IIT-Madras. IndicTrans2 supports translation in all 22 languages listed in the Constitution. If the allegation is based on foolproof evidence that Krutrim had used open-source tools without attribution, then it is liable for prosecution under the Copyright Act 1957. However, more significant than the legal implications is the crisis of credibility that it raises.    

This review of ‘An Unflattering Story About Ola 's Bhavish Aggarwal’ reveals and highlights the important points raised in this book. Its pages are packed with information. Information that will make you sit up, think and applaud unicorns and soonicorns—startups waiting to make the billion dollar club—with a certain caution.   

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A seasoned journalist working in the profession for 40 years, Ajith Pillai has reported out of Delhi, Mumbai, Chennai, Andhra Pradesh and Kashmir on a broad spectrum of events related to politics, crime, conflict and social change. He has worked with leading publications, including The Sunday Observer, Indian Post, Pioneer, The Week and India Today, where he headed the Chennai bureau. He was part of the team under Editor Vinod Mehta that launched Outlook magazine and headed its current affairs section till 2012. Under his watch, Outlook broke several stories that attracted national attention and questioned the government of the day. He has written two books—’Off the Record: Untold Stories from a Reporter’s Diary,’ and a novel, ’Junkland Journeys’. He is currently working on ’Obedient Editor’, a satirical novel on the life and times of a ‘compromised’ journalist.