With India shaping the next wave of digital transformation, start-ups continue to witness a rapid growth trajectory, creating an ecosystem of un-hindered technology innovation. The National Association of Software and Services Companies (NASSCOM), in collaboration with Zinnov, today released its annual start-up study, titled “Indian Tech Start-up Ecosystem: Year of The Titans”. With rising investor confidence, start-ups leveraging deep-tech, and tapping unexplored talent pool, the Indian tech start-up base continues to witness steady growth, adding over 2250 start-ups in 2021.
Deepening Investor Commitment
Startups raised $24.1 billion in 2021, a two-fold increase over pre-Covid levels. In comparison to 2020, there was a 3X increase in number of high value deals (deals > $100 million), demonstrating investor confidence with a pool of active Angel investors of 2400+ and a readiness to take significant risks. While the United States remains the leading source of foreign direct investment in start-ups, worldwide involvement is also growing. 50% of the deals had at least one India-domiciled investor.
Wealth Creation for 1.3Bn Indians
The start-up ecosystem saw a 2X gain in cumulative valuation from 2020 to 2021, with an estimate of $320 – $330 billion, demonstrating the sector’s development and recovery throughout the pandemic. In the last decade, the ecosystem has played a key role in growing direct and indirect job opportunities, providing 6.6 lakh direct jobs and more than 34.1 lakh indirect jobs. The industries that saw the most net new job creation were BFSI, EdTech, Retail and Retail Tech, FoodTech, SCM & Logistics and Mobility. On the back of internet commerce, freelancers, and service industries, indirect jobs have also recovered.
Speaking on the occasion, Debjani Ghosh, President, NASSCOM, said, “The performance of the Indian startup ecosystem in 2021 has proved the resilience and dedication being put by multiple startups across segments. The ecosystem has grown immensely and positioned itself as a vital contributor to the growth of India’s digital economy. With record-breaking funding, an increase in the number of unicorns, jobs being created in the near term, the Indian startup ecosystem’s future looks even brighter going ahead in 2022”.
Pari Natarajan, CEO, Zinnov, opined that, “When compared to the UK, US, Israel, and China, 2021 has been an outstanding year for the Indian startup ecosystem, with the highest growth rate in terms of deals, both in seed stage and late-stage funding, and number of startups. Indian firms have done an outstanding job of selling into global markets, notably in categories such as global SME and developer ecosystem. The fact that Indian startups are digitally native serves as an excellent model for digital native enterprises throughout the world. I believe that Indian startup ecosystem is just getting started. It’s Day Zero and we are super excited about the potential of the startup ecosystem over the next decade, onwards and upwards.”
Inclusive and Diverse Ecosystem
Factors such as Building for Bharat, Investments, Talent Availability, and Ecosystem Support are driving entrepreneurs to use emerging hubs to create businesses. Entrepreneurs are developing solutions for the entire country, with a focus on fundamental and core requirements, localization, and the promise of delivering equality to the masses. Established start-up centres like Delhi-NCR, Bangalore, Chennai, Pune, Hyderabad and Mumbai account for 71% of all startups. Outside of the developing start-up centres like Jaipur, Kochi, Kolkata, Chandigarh, and others, 29 percent of all start-ups are located.
Diversity and inclusion are becoming hallmarks of the Indian tech start-up ecosystem, as evidenced by the fact that at least one-woman founder/co-founder is present in 12-15 percent of start-ups and 10 unicorns. Women-led start-up success stories, academia-led efforts, business programmes, and government initiatives are driving the inclusion and diversity flywheel.
Increasing Breadth and Depth in Sectors and becoming Home of Unicorns
High-value start-ups emerged quicker than ever this year in micro-verticals like Fintech and Edtech. In terms of maturity and investments, BFSI, Retail and Retail Tech, Enterprise Tech, and EdTech reign supreme. BFSI witnessed a breakout year, accounts for 13 Unicorns additions and 35+ potential unicorns: and 25% of investments in 2021. Agri Tech, Automotive, Social Platforms, Industrial and Manufacturing witnessed significant up-tick.
India accounting for 70 unicorns added a record number of new unicorns (42) in 2021 across 18 sectors, third highest after USA and China, with a cumulative valuation of newly added unicorns stands around $ 90Bn. Pipeline of potential unicorns expanded dramatically through 2021 reaching 135, and 6x increase in global unicorns with Indian technology center as compared to 2015.
Intensifying Corporate Participation
In 2021, 260+ unique corporates active; up from 170+ in 2020 leveraging multiple collaboration models and approaches, leveraging the Indian start-up ecosystem. 175+ unique corporates invested in start-ups in 2021; with 52% being global MNCs. With each passing year, more corporates are building structured open innovation programs and 2021 witnessed 80+ unique open innovation programs; with 62% hosted by global MNCs with R&D centers in India. Corporate continue to register success stories via structured collaboration programs, Co-Innovation, Joint Go-To-Market strategies, Platform Evangelization and License / Vendor agreement.
India’s Unique Digital Infrastructure
India’ unique technology infrastructure has undoubtedly redefined problem-solving approach of the technology landscape. It is fueling development and deployment of new technology infrastructure across all key sectors to meet the $1Tn Digital Economy goal.Not only this buteven India Stack has considerably increased India’s total addressable market. Startups are utilising stack to create novel products and scale swiftly. And the increasing trustworthiness of these firms in BFSI, healthcare, and agritech bears witness to this. There have been over 80 digital efforts in the agritech industry, as well as over 500 plans and programmes to solve data discrepancies and the fragmented character of public service. Even in the health-care sector, there has been a digital revolution, and a large number of individuals have benefited from it.
Although cautiously optimistic, in 2022 Indian start-up ecosystem will continue to make headlines and strengthen at the core. Few priority areas that can further fuel the growth of the startup ecosystem are encouraging tech start-ups to innovate for India, retain the best digital talent in the country, procurement reforms to enable start-ups scale, create avenues for attracting foreign investments into Indian start-ups, and grow global thought leadership for “World class from India”.
Read More News: https://www.enterpriseitworld.com/executive-movements/
Watch CIOs Tech Perspectives: https://ciotv.live/
Read IT Partner News on: https://www.smechannels.com/
