While in the first decade of the 21st century, India focussed on connecting cities and metros online, the last ten years was fully dedicated to using the internet for creating businesses and start-ups opportunities and extending the digital presence to rural India.
Currently, the world’s largest working population exists in India and start-ups are going to take the advantage of it in the coming years.
In the last 5 years, the Indian start-up ecosystem has grown rapidly. Currently, India is ranked second among world start-up ecosystems with the continuous growth of more than 12%. Earlier Indian start-up ecosystem was only limited to the tech companies but now it has grown to thousands of new innovative enterprises.
Indian Start-up Ecosystem Report 2020 indicates that more than 55,000 start-ups have been initiated in India till date, among them more than 3,200 start-ups have raised $63 Bn in funding in the last five and half years alone and 2-3 tech start-ups are launched every day. However, the covid-19 pandemic has affected the ecosystem badly and the current trends show a decline in start-ups investment.
Not only the central government but different states have also shown a tremendous commitment for the upliftment of the start-up ecosystem. Because of joint efforts of states and the central government, Bengaluru, Delhi-NCR and Mumbai have emerged as the top 3 start-ups hub in India.
Funds of funds for start-ups Aspire – A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship, Stand-Up India Scheme, Atal Innovation Mission, Start-ups Intellectual Property Protection (SIPP) scheme are few of the noted initiatives started by the Government of India in the last 5 years.
After realizing the potential of start-ups, big corporate giants like Facebook, Microsoft, Reliance etc are partnering and investing in the ecosystem. Facebook already invested in Social commerce app Meesho and Edtech Unacademy. On the other hand, Microsoft has investments in health tech company innovate and SaaS platform Faye.
While the start-ups have grown rapidly from tech to other sectors but still so many sectors are untouched. India needs research supported entrepreneur ecosystems for the right growth. Academic institutes’ initiatives like business incubation centres are helping India to grow new start-ups.
However, the ecosystem has shown gradual recovery from the last 3 months and most of the sectors have recovered to the pre-covid time. Sectors like healthcare, commerce and education have provided positive growth because of digital acceptance, while sectors like travel, hospitality are negatively impacted but now on a recovery path.
As per the mint report, Rajan Anandan, President, TiE Delhi-NCR, said, “Although the immediate impact of the lockdowns on the Indian startup ecosystem was severe, we have been amazed to witness how quickly Indian founders have acted to reimagine their businesses. What has been most impressive is how many start-ups have reduced burn and improved their unit economics very rapidly.”
“Although Covid-19 has been a major setback for the ecosystem, we believe that the changes that the pandemic has brought on will make our ecosystem much stronger, across every dimension. India is on a path to have 100 unicorns by 2025,” he added.
Coming 2-3 years are very crucial for the sustainability of the Indian start-up ecosystem after the current pandemic interruption. However, the rise in domestic demand is a positive sign for Indian start-ups. Indian start-ups and new enterprises should re-evaluate their current position and in future, they should work towards a solution-oriented model in the middle and long term strategy.
