STARTUP ECOSYSTEM IN INDIA: QUICK FACTS

India has the 2rd largest startup ecosystem in the world; expected to witness YoY growth of 10-12%

20,000 startups in India; around 4,750 of these are technology led startups

1,400 new tech startups were born in 2016 alone; implying there are 3-4 tech startups born every day

As per a survey report by Innoven Capital (survey of 140 founders); leading factors that make India appealing as a startup nation are-

  1. Cost of doing business

  2. Proximity to customers/vendors

  3. Size of domestic market

7 million college graduates per year; 55% of the youth prefer working in startups over corporates (as per a youth of the nation survey of 150K young Indians). Median age of founders: 31 years

Second largest consumer internet market in the world (overtaking China) with 462 mn internet users, 80% of these users are mobile based 

While eCommerce and Aggregators have become mature; Fintech, Edutech and Healthtech are emerging verticals

Bangalore, Mumbai and NCR top startup destinations with over 65% of the total Indian startups.

Bangalore has also been listed within the world’s 20 leading startup cities in the 2015 Startup Genome Project ranking. It is also ranked as one of the world’ s five fastest-growing startup cities

INDIA STARTUP ECOSYSTEM: 3,000+ STARTUPS NOW, 10,000 BY 2020

The first set of data shows the sheer volume of India’s tech ecosystem. With 3,100 startups, and 800 more every year, this is the 4th largest country after the US and China. The positioning of India as a startup country is also thought of in the light of other famous startup scenes such as the US, Israel, Singapore.

The growth of the scene should go as far as 2,000+ new startups created each year by 2020, and job creation from these entrepreneurs go from 65-75k as of today to 250-300k by 2020.

Of course India is a continent of its own, and some 6 cities are trusting 90% of the technology scene.Bangalore (now Bengaluru) and the New Delhi area account for 28% and 24% of the startups in India, although emerging scenes pop up around the country, from Mumbai to Hyderabad, Pune or Chennai.

WHO ARE THE INDIAN STARTUPERS AND ENTREPRENEURS?

The profile of entrepreneurs in India doesn’t give too much surprise, with 32 y.o as an average age, only 6% women founders.

Interestingly enough though, the biggest chunk of startupers in the country have a background in MNCs and Indian tech companies (35% and 27% of the sample of the report). Only 13% of startup founders have no experience in the field before launching their venture.

The ecosystem itself is supported by a growing number of funds, angels, and support organisations such as incubators, accelerators, event platforms and academic programs.

Where it’s possible to see a growth in terms of ecosystem is by the growth of the numbers of all these components, as well as of the average size of deals.

In India, the average investment in 2010 was $4.2m, it should reach more than $11m for 2014. Investments are also spread across a wide range of stages, from seed funding to growth stage. The recent big fundraising of e-commerce specialist Flipkart ($1bn raised at $7bn valuation) and the investment of $2bn from Amazon show this maturity, at least for the e-commerce part.

PRODUCTS AND SERVICES FOR THE GROWING MIDDLE-CLASS OF INDIA

Of course just like in any market, not is all positive.

If India, by its market size and its fast growing middle-class (50m in 2007, 583m expected by 2025), and a lot of blue oceans (Big DataInternet of Things), there are some blocks on the road. Regulations and bureaucracyare often said to be big and inefficient in India, infrastructure is very unequal across the country.

This report on the India startup ecosystem ends up with a series of key points the government needs to address to foster an even stronger culture of entrepreneurship, from the equivalent of a small business act to get startups to take part into big public projects, up to clearer funding rules and special administrative & economic areas for startups.

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