2017: How the Indian Start-up Ecosystem has Fared
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With the Indian government’s required push towards creating a conducive startup environment in the country, the ecosystem has seen a massive overhaul in the past few years. From Startup India, Standup India to the vision of a Digital India, the government has been building the right gateway for Indian start-ups to succeed.
Another initiative that has further boosted the growth of start-ups in India, is the government’s ease of doing business policies. With better taxation policies, easier methods to start up and greater access to loans, start-ups have had a great year.
The NASSCOM report unveiled at the NASSCOM Product Conclave shared insights into how the ecosystem has been evolving constantly and the various sectors that have grown in the last year.
Over 1,000 start-ups added in 2017
According to the report, over 1,000 start-ups have been added to the list of tech start-ups in India, making way for an overall growth of seven per cent. With this, India continues to be the third largest start-up market in India, only after the US and UK. Bengaluru, NCR and Mumbai are still dominating the ecosystem as the major startup hubs in the country. However, according to the report, another major development has been noticed in the Tier II and Tier III cities in India which now account to 20 per cent of start-ups in the country.
With India holding the 60th rank in the global innovation index, the year 2017 also saw non-US investors foraying into India and expanding their investment portfolio.
The mortality rate of start-ups stands at 35 per cent.
Sectors that have Hit the Right Spot
It has been a great year for fintech which revelled in the aftermath of demonetization and was aided by the implementation of GST. Many entrepreneurs predicting the growth of the sector started looking at the various ways in which the elements of fintech could be developed into a successful business model. India stands second in the index of global fintech adoption. The report also states that over 50 per cent of start-ups added in 2017 were in the B2B segment with fintech and healthtech leading the pack.
However, the hot sectors that now have everyone’s notice are Internet of Things, Augmented Reality and Blockchain. Considering the hullaballoo around these sectors, it is safe to say, well, no surprises there! The other sectors that are witness to development are robotics and 3D printing.
Social start-ups on the other hand have reported an 18 per cent year-on-year growth.
While news reports have suggested that the number of deals has gone down this year, the total amount of funding however has gone up, and that might not be good news for seed stage start-ups. Raising a red flag in the report, NASSCOM states that the seed stage funding has dropped by 53 per cent and funding for start-ups that were founded in the last five years has come down slightly from $2 Bn to $1.8 Bn.
Proving that the B2B sector is rising, the funding here has gone up from 27 to 32 per cent. The funding of the bigwigs or the unicorns too has risen to a staggering $6.4 Bn this year.
An Eager Audience for Start-ups
Almost every other corporate has woken up to the need of the hour that is innovation. They have been partnering and acquiring start-ups or even taking part in their growth by forming accelerators. Corporates bring their stability to the agility of start-ups. The report states a growth of more than 30 per cent in the country’s accelerators. The number of mergers and acquisitions has also significantly risen in 2017 with many non-tech Indian companies acquiring start-ups.
Colleges too are not far behind in instilling the entrepreneurial spirit amongst youngsters. More and more awareness about entrepreneurship too has been at an all-time high in 2017.